Rs.3770 crore uncovered under the Black Money law
The administration succeeded in getting 638 declarations from those with undisclosed foreign assets The declarations added to Rs.3770 crore. The government had given a 3-month window under the Black Money and Imposition of Tax Act, 2015 (the Act) for people to make declarations. This was a 'special offer' for those with undeclared income before a more stringent law kicks in from April 2016.
The black money bill was cleared to be introduced in the parliament by the Cabinet. It also included the provision to permit the government to start a "one-time compliance scheme" for those with undisclosed assets abroad to come clean before the new law kicked in. Finance minister Arun Jaitley also recommended a set of severe measures against those with black money overseas.
The Parliament passed the black money bill with its ratification from Rajya Sabha. The bill had already been passed in Lok Sabha a week before. The bill provided for a ten-year jail penalty and 120% tax. According to an unofficial estimate, the total illegal money saved in overseas banks was between $466 billion and $1.4 trillion.
The government opened a 3-month window for the disclosure of undisclosed foreign assets till September 30 under the new black money law. After the given 3 months, those found with undeclared overseas wealth would be obligated to repay "30 per cent tax, 90 per cent penalty and face criminal prosecution." Those availing this offer would be paying 30% tax and 30% penalty amount.
In a bid to make more people come forward and make use of the 3 month declaration window, the government promised total confidentiality of the information.
The Government declared that those disclosing overseas assets during the 'black money compliance window' wouldn't be facing any prosecution under FEMA. Furthermore, for all the declarations made "no penalty/ prosecution proceedings under the specified five enactments shall be applicable in relation to the asset declared". These five enactments provided were Income-Tax Act, FEMA, Wealth Tax Act, Customs Act and Companies Act
Foreign Exchange Management Act 1999 manages foreign exchange and its contravention can lead to "penalty up to thrice the sum involved" or Rs.2 lakh where the amount is not quantifiable.