Ahead of black money law rollout, evaders warned to comply

Indian Revenue Secretary Shakti Kantadas says there will be no delay in rolling out the provisions of the act or operationalizing or putting into effect the provisions of the Black Money Act.

Indian Revenue Secretary Shakti Kantadas says people should come clean on undeclared bank accounts and assets during the one-time compliance window because hiding the same is going to get much tougher here on.

In an interview to CNBC-TV18, Kantadas says, “The cabinet has also decided that government will sign the foreign account tax compliance act (FATCA) agreement with the United States. That takes effect from September of this year wherein there will be a lot of exchange of information between India and United States. So therefore, it will become very difficult in the years to come to suppress or hide such kind of undisclosed assets.

” The Black Money Bill will provide a short window to overseas asset holders to declare their wealth, pay taxes and penalties to escape punitive action .

Below is the verbatim transcript of Shakti Kantadas’s interview with Sapna Das on CNBC-TV18.

Q: The first off question on the new bill if I may ask is that, the compliance window appears to be very stringent. I know that the government has made it very clear that there is absolutely no question of any soft landing or any amnesty being offered, but how would you rate these chances of success of this scheme going forward? We understand the rules are yet to be notified.

A: It is a one-time compliance opportunity which we are giving, which the government is giving to such people who have illegitimate or undeclared, undisclosed assets, including bank assets, accounts, etc abroad because the strong and the stringent provisions of the Act will take effect. Before that, it is a one-time opportunity the government is giving to people who want to come clean. The intention is only that.

The government does not want to prosecute everybody. If somebody wants to come clean, let him come clean and it is not an amnesty, because in an amnesty you pay only the tax, there is no penalty.

Here it is tax, plus penalty and as I had mentioned earlier, the intention is not to provide a soft landing opportunity to anybody. If somebody wants to comply, this is a facility which the government is giving.

Now, talking about the success or failure of this compliance opportunity we are giving, there is nothing called success or failure of this scheme. It is for such people who have such assets abroad to avail this facility. If they do not avail the facility, then naturally they will have to face the consequences which are inherent in the strong provisions of the act. And let me also add that from 2017 onwards, the automatic exchange of information between countries, that will take effect and we will automatically get a lot of information about financial transactions and accounts etc held by Indian tax payers abroad.

The cabinet has also decided that government will sign the foreign account tax compliance act (FATCA) agreement with the United States. That takes effect from September of this year wherein there will be a lot of exchange of information between India and United States. So therefore, it will become very difficult in the years to come to suppress or hide such kind of undisclosed assets. So, therefore government took a very considered decision to give this one time opportunity to people to come clean.

Q: The one time opportunity has not been defined so far. Of course we understand as the financials also indicated that it will depend after the passage of the bill. But from when do you plan to implement the… once it becomes as act, when do you plan to roll it out, basically?

A: There will be no delay in rolling out the provisions of the act or operationalizing or putting into effect the provisions of the Act. It can be notified and it will be notified once the bill is passed in the parliament and it becomes a law.