Prime Minister Narendra Modi may have said in his Independence Day speech that the government will go ahead with stringent black money laws, but the Finance Ministry is looking at relaxing black money declaration norms so that there are more disclosures under the compliance window offered by the government to come clean on unaccounted overseas income and assets.
There are indications that the government may give a fresh look into massive taxes imposed on declaration of black money, under which the declared unaccounted income or wealth will not be taxed for the second time, but the income accruing from such assest will be taxed.
Sources in the government said that in the next 2-3 weeks, the government will come out with more clarification on the compliance window and disclosure norms under black money laws. Sources also said that there will be a high level meeting of Finance Ministry officals and the income tax department on how to make black money laws more compliant.
According to media reports, there have not been too many applicants in the first month seeking to avail of the three-month long compliance window.
Sept 30 deadline Under the compliance window, undisclosed assets abroad can be declared by September 30, while the person will get another three months till December 31, to pay tax and a penalty on such assets.
According to the newly passed law, taxes will be levied at the rate of 30 per cent, while the penalty will be 100 per cent of the tax. Altogether, the person will have to pay 60 per cent of the taxable value or amount declared. The Finance Ministry is also expected to come up with a second set of the frequently asked questions (FAQs), based on inputs received from various stakeholders since the notification of the compliance window on July 1.
The Prime Minister in his Independence Day speech had ruled out any dilution of rules under the black money law to bring back income and assets from abroad. He had said that under the compliance window given by the government, people had declared assets amounting to Rs 6,500 crore, so far.