Of the total money decleared, 45 per cent would accrue to the government as tax and penalty, says Arun Jaitley.
Union Finance Minister Arun Jaitley on Saturday announced that the Central Board of Direct Taxes (CBDT) had received total disclosures of Rs. 65,250 crore under the Income Disclosure Scheme, 2016 in the form of cash and other assets.
The Minister added that since some disclosures that were received manually were yet to be tabulated and verified, the figure could be revised upward. The four-month window under the scheme for declaring undisclosed income or black money that had escaped assessment closed at Friday midnight. Mr. Jaitley refused to draw comparisons of the current Income Declaration Scheme (IDS), 2016 with the Voluntary Disclosure Scheme of 1997, in which the then government, he said, had mopped up Rs. 9,760 crore in taxes at an average of about Rs. 7 lakh per declarant. Unlike the IDS, Mr. Jaitley said, the earlier scheme had not penalised the declarents and allowed them to value the assets declared at the market prices of 1987 rather than current rates.
Mr. Jaitley told a media conference that the disclosures received were “significant, given the average disclosure is of about Rs 1 crore”. In all, 64,275 declarations were filed online and via the prescribed forms. “With the final stock taking of declarations being filed in physical printed forms all over the country till late night on the last day, this number is likely to be further revised upwards,” an official release said.
Assets with tax penalty
The scheme had provided a one-time opportunity to black money holders who had not paid full taxes in the past to come clean by declaring their domestic undisclosed income and assets by paying tax plus penalty at the rate of 45 per cent. No target for disclosures or collections from the scheme had been set for the CBDT, Mr Jaitley said. The government stands to mop up 45 per cent of this, or about Rs 29,000 crore, in taxes and penalties.
The CBDT removed the difficulties that had been expressed by those wanting to avail of the scheme, especially with respect to making the tax payment within a short span by agreeing to accept it in three instalments, the last being in September 2017. The declarents have been assured of absolute confidentiality.
The income tax and penalties collected under the scheme will be used for public welfare, Mr. Jaitley said. “If we become a totally tax-compliant country we will have more resources for public welfare.”
Mr. Jaitley shared the progress of the steps, he said, the BJP-led NDA Government had taken in the last two years for increasing tax compliance and reducing tax avoidance in the country. In the 175 cases of black money allegedly stashed overseas in HSBC bank accounts, the CBDT has already filed 164 prosecutions following assessments of sums that add up to Rs 8,000 crore. The probe is being monitored by the Special Investigation Team (SIT), set up under the directions of the Supreme Court.
Following the leads from the investigations undertaken by the International Consortium of Investigative Journalists (ICIJ), the CBDT has detected Rs.5,000 crore of undisclosed deposits in foreign accounts made and filed 55 prosecution cases in those cases. Similarly, investigation in the Panama cases has led to 250 references being made to other countries asking for details about tax evaders, bank accounts etc. A quantum jump in the searches and survey has resulted in the seizure of Rs.1986 crore as well as undisclosed income of Rs.56,378 crore in the last two and half years, the Finance Minister said.
By more intensive monitoring of the database of non-filers of tax returns, the CBDT realised Rs.16,000 crore in additional tax collection. Cases of prosecution and compounding in the last two and half years rose to 3,626, the release said