I-T department can probe 16-year-old evasion cases

The Modi government’s comprehensive new law on black money held overseas will allow the tax department to open records as far back as 16 years to unearth evasion and enable prosecution.

Finance Minister Arun Jaitley said in his budget speech that he would introduce the law in Parliament

during the current session. The government also said that ahead of the law’s enforcement, it would provide a one-time compliance window of a few months. During this period, evaders will be able to bring back black money held overseas by paying concessional penalty, the tax amount due and the interest payable on it.

The tax department will be able to detect all those offenders who fail to come forward during this period as the automatic exchange of information between countries will kick in from 2017, Revenue Secretary Shaktikanta Das told The Hindu.

“After the limited compliance window is over, the new law will be enforced forcefully and effectively which will make it difficult for evaders to suppress information…the law will allow the tax department to reopen books of 16 years ago to unearth evasion,” Mr. Das said.

However, he said, sufficient internal controls and safeguards would be built in against harassment or arbitrary use of power by tax officers.

The bill would have a clear separate section for rules to protect the interest of students and professionals who could have accounts or assets overseas on account of short periods of time spent overseas for assignments or studies, he said.

He also clarified that this was not an amnesty scheme as those availing of it will also have to cough up penalty and interest rate on the tax amounts due.