New Delhi: In a bid to unearth black money and illicit assets stashed abroad, the Union Cabinet today approved a Bill with stringent provisions for prosecution of such offences with rigorous imprisonment of up to 10 years.
"The Cabinet has approved Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015," official sources said on the decision of the Cabinet meeting chaired by Prime Minister Narendra Modi.
Under the provisions of the new Bill, which was announced in the Budget, the offence will be non-compoundable, offenders will not be permitted to approach the Settlement Commission and penalty at the rate of 300 per cent of taxes will be levied on the concealed income and assets.
The Bill also will make non-filing of income tax returns or filing or returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment of up to 7 years.
Concealment of income and assets and evasion in relation to foreign assets will be prosecutable with punishment of 10 years of rigorous imprisonment.
Since it is a money Bill, it will be introduced in the Lok Sabha after obtaining the President's assent, sources said.
The Bill is likely to be introduced before the Lok Sabha adjourns for a month long recess.
The government has been under pressure to act on the issue of black money stashed abroad as the BJP and Modi had mounted a huge campaign during the Lok Sabha election last year with promise to quickly repatriate such illegal wealth.
Individuals, entities, banks and financial institutions would be liable for prosecution and penalty if found abetting such offences.
Concealment of income or tax evasion in relation to a foreign asset will be made "predicate offence" under the PMLA, enabling enforcement agencies to attach and confiscate such assets.
Sources said, the new legislation will provide that income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate. Exemptions or deductions, which may otherwise be applicable in such cases, shall not be allowed.
Beneficial owner or beneficiary of foreign assets will be mandatorily required to file return, even if there is no taxable income.
Date of opening of foreign account would be mandatorily required to be specified by the assessee in the return of income, they said.
In the Budget speech, the Finance Minister had also announced that concealment of income or evasion of tax in relation to a foreign asset will be made a predicate offence under the Prevention of Money-laundering Act, 2002 (PMLA).
This provision would enable the enforcement agencies to attach and confiscate unaccounted assets held abroad and launch prosecution against persons indulging in laundering of black money, he had said.
Besides, the the government is also likely to amend Foreign Exchange Management Act, 1999 (FEMA) for seizure and confiscation domestic assets equivalent to the value illegal overseas assets.