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To check black money menace, the Cabinet on Tuesday approved a new bill that would give more powers to the tax department in tracking illicit wealth stashed abroad and provide for strict penal actions for such offence.
Sources said that the Cabinet approved the new bill on Tuesday evening and it could be presented in Parliament during the ongoing session.
Finance Minister Arun Jaitley had announced in his Budget speech on February 28 that the government would bring in a comprehensive law to check the black money menace by providing for a jail term of up to 10 years for hiding foreign assets and up to 300 per cent penalty.
Jaitley had also said that a host of other tough measures including dis-incentivising of cash dealings in real estate and other transactions would be put in place.
Under the proposed law, concealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with rigorous imprisonment of up to 10 years, Jaitley had said, while adding that the offence will be made non-compoundable and the offenders will not be permitted to approach the Settlement Commission.
As regards curbing domestic black money, the finance minister had said a new and more comprehensive Benami Transactions (Prohibition) Bill would be introduced in the current session of Parliament
He had also proposed to amend the Income-tax Act to prohibit "acceptance or payment" of an advance of Rs 20,000 or more in cash for purchase of immovable property.
Sources said, the new legislation will provide that income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate. Exemptions or deductions, which may otherwise be applicable in such cases, shall not be allowed.
Beneficial owner or beneficiary of foreign assets will be mandatorily required to file return, even if there is no taxable income.
Date of opening of foreign account would be mandatorily required to be specified by the assessee in the return of income, they said.
In the Budget speech, the finance minister had also announced that concealment of income or evasion of tax in relation to a foreign asset will be made a predicate offence under the Prevention of Money-laundering Act, 2002 (PMLA).
This provision would enable the enforcement agencies to attach and confiscate unaccounted assets held abroad and launch prosecution against persons indulging in laundering of black money, he had said.
Besides, the government is also likely to amend Foreign Exchange Management Act, 1999 (FEMA) for seizure and confiscation domestic assets equivalent to the value illegal overseas assets.