13/05/2015 10:10 PM IST | Updated 15/07/2016 8:25 AM IST

Rajya Sabha Passes Black Money Bill, Government To Crack Down On Indians With Illegal Assets Abroad

World Economic Forum/Flickr
Arun Jaitley, Minister of Finance, Corporate Affairs and Defence of India at the World Economic Forum - India Economic Summit 2014 in New Delhi, Copyright by World Economic Forum / Benedikt von Loebell

NEW DELHI -- A bill to deal with black money stashed abroad was passed by Parliament today with government warning those having such assets to utilise the 'compliance window' or have sleepless nights once the global automatic information exchange system comes into effect in 2017.

Finance Minister Arun Jaitley said in Rajya Sabha that the new law, with stringent provisions, will help "squeeze" black money even as he underlined that the option of 'compliance window', which may run for a few months, was not an amnesty scheme.

"The world is no longer willing to tolerate tax havens which thrive in secrecy," he said, just before the 'Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015' was approved by the House, two days after the Lok Sabha passed it.

Jaitley, however, made it clear that the new law will not cover those having amounts equivalent to Rs 5 lakh in bank accounts abroad, which may belong to students or those working there.

The compliance window will provide an opportunity to people to come clean by declaring overseas assets and paying tax and penalty totalling 60 per cent, Jaitley said while replying to a debate on the bill on the last day of the session.

The timeframe for the compliance window will be notified as part of the rules.

"It is a taxation which is being imposed on an asset or an income outside. Since the tax has been imposed for the first time, we are giving you a compliance period where you pay 30+30 per cent and then you can sleep well.

"And then also remember, if you don't use this compliance window now, time will run out because by 2017 there will be a realtime automatic disclosure of information taking place," he said.

The Bill, which seeks to unearth unaccounted funds and assets stashed by Indians abroad and provide for 120 per cent tax and penalty in addition to 10-year jail term, will become law after getting assent of the President.

The government has also armed itself to attach domestic property of equivalent value of such offenders.