Low Yield For Indian Tax Amnesty
India collected INR24.28bn (USD363.4m) in taxes and penalties after 644 declarations were made under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015.
The Black Money Act, which came into force on July 1, 2015, provided taxpayers with a one-time compliance window to declare assets held abroad and pay a flat rate tax of 30 percent and a 30 percent penalty. The compliance window closed on September 30, 2015.
The Ministry of Finance said on January 6 that the total value of these 644 declarations was INR41.64bn, but the actual amount received by December 31 was INR24.28bn.
The relatively low level of revenue achieved by the amnesty was attributed to declarations that covered taxpayers that were already to be investigated as a result of information obtained through double tax and tax information exchange agreements or because the applicant failed to make payment by the December 31 deadline.
As per section 71(d)(iii) of the Act, a taxpayer was precluded from the amnesty’s terms where the Central Government has received information in respect of the assets under a tax agreement. The Government previously said the person is entitled for voluntary declaration in respect of other undisclosed foreign assets for which no information has been received.
