After Modi, Jaitley now orders black money holders to come clean

The minister said any declaration made under the law will be protected

Offering black money holders one last chance to come clean, Finance Minister Arun Jaitley, on Tuesday, said information on assets disclosed during the one-time compliance window will not be shared with any other authority.

Jaitley, who met industry chambers, chartered accountants and tax professionals to clear any misgivings about the four-month compliance window provided to domestic black money holders to pay their taxes and escape harsher penalties, said there will be no extension of the scheme.

"People who have (undisclosed) income and have stayed outside the income tax net, this is the last chance to declare them and sleep peacefully," he told reporters after the meet.

Black money holders who do not avail of the government's offer and continue to hide wealth will be shown "consequences" of doing so, he said.

"There is a... (new black money law) and whosoever comes within its purview will be told about consequences (of holding black money)," he said.

The minister said any declaration made under the law will be protected. "That information is not to be shared with any other authority. It won't be made public, it won't be shared with anybody."

The Income Declaration Scheme or IDS, which opened on June 1, allows domestic black money holders to declare ill-gotten wealth, pay a total of 45 per cent in tax and penalty and escape prosecution.

"The compliance will remain open from June 1 to September 30 and people who have such (undisclosed) income, which has not come under assessment they can disclose such incomes and legitimise by paying 45 per cent tax and penalty," he said.

The meeting called to popularise the scheme and get best results, was also attended by Commerce and Industry Minister Nirmala Sitharaman, Power and Coal Minister Piyush Goyal, Oil Minister Dharmendra Pradhan and Minister of State in Prime Minister's Office Jitender Singh.

"This is not an immunity scheme. Immunity scheme is one where there is no penalty. In IDS there is penalty," Jaitley said adding the Income Tax Department may come out with a third set of clarifications on the scheme in form of frequently asked questions (FAQ) based on inputs from Tuesday's meeting.

The trade bodies, he said, have suggested that the tax should be allowed to be paid in installments. "We will consider this and we will come out with FAQs."

"We have nothing to do with any investigation under any law but any declaration made under this law is protected. That information is not shared with any other authority. It won't be made public, it won't be shared with anybody," Jaitley said. "In such disclosures we do not ask for source of income and no enquiry takes place."

Today's meeting was called by the Revenue Department as well as the Central Board of Direct Taxes (CBDT) with industry chambers, trade bodies, CAs and tax professionals to discuss the income disclosure scheme.

"We are taking this as a campaign, as a mission mode and the professional bodies and trade organisations, we have taken their suggestions. We will come out with a third FAQ. We expect that anyone who has such income they disclose it and legitimise their income and assets," he said.

Government ministers as well as CBDT officials will be travelling throughout the country to educate people about the scheme, so that maximum number of people avail of it, he said.

Prime Minister Narendra Modi had earlier this week warned that the black money holders to take advantage of the scheme or face action.

"It will be better that you take advantage of the window provided and save yourself from the difficulties that you can face after September 30," he said.

The four-pronged strategy prepared by the CBDT for the success of the scheme, includes single point contact to ensure confidentiality, setting up of facilitation centres across the country, giving wide publicity and monitoring at the highest.

The government has promised that there will be no inquiry into the source of the undisclosed income and assets if declaration is made voluntarily.

In order to give wide publicity, the CBDT has also suggested putting up posters about the Income Declaration Scheme-2016, at places frequented by potential declarants, like club houses, posh markets, showrooms of high end products.

Last year the government came up with a similar scheme for persons having unaccounted black money abroad. Disclosures during that window were charged with a total tax and penalty of 60 per cent.

A total of Rs 4,147 crore (Rs 41.47 billion) of undisclosed wealth was declared during the 90-day foreign black money compliance window that ended September 30. At 60 per cent (30 per cent tax and 30 per cent penalty), the government got a net tax of Rs 2,500 crore (Rs 25 billion) from the declarations.

Industry and trade bodies also demanded that information disclosed in the Income Disclosure Scheme (IDS) should not be shared with the indirect tax wing Central Board of Excise and Customs (CBEC).

"The government has assured that the information would not be shared with any other authority so that there is no separate proceedings under Service Tax or VAT laws," said Krishan Malhotra, Senior Partner, Dhruva Advisors.

Various trade bodies suggested some leniency in payment of taxes and asked the government to extend the date for the scheme to address the cash flow problem around November.

"The government was very receptive to the concerns of the industry and assured that it would come out with more clarification to address the apprehension," Malhotra said.

Confederation of India Industry’s director general Chandrajit Banerjee said the meeting among other things discussed confidentiality.

"The government assured that there is no need to disclose the source of income under the scheme. Besides, requests were made for payment to be made in installment," Banerjee said.