The Union cabinet approved a bill on Tuesday that would introduce a 10-year jail term for people convicted of illicitly stashing wealth abroad, a senior official said.
The move is viewed as a first step towards empowering tax authorities and meeting the commitment of Prime Minister Narendra Modi’s 10-month-old government to enact a new law on ‘black money’, a key political challenge.
Finance minister Arun Jaitley announced the pledge as part of reform measures in last month’s budget.
“The bill has a provision of 10-year imprisonment for concealment of overseas assets,” the official said after a cabinet meeting, requesting not to be named.
It is expected to be introduced during the current session of parliament.
“The Cabinet has approved Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015,” official sources said on the decision of the Cabinet meeting chaired by Prime Minister Narendra Modi.
Under the provisions of the new bill, the offence will be non-compoundable, offenders will not be permitted to approach the settlement commission and penalty at the rate of 300% of taxes will be levied on the concealed income and assets.
The bill will also make non-filing of income tax returns or filing or returns with inadequate disclosure of foreign assets liable for prosecution with punishment of rigorous imprisonment of up to seven years.
Concealment of income and assets and evasion in relation to foreign assets will be prosecutable with punishment of 10 years of rigorous imprisonment.
Since it is a money bill, it will be introduced in the Lok Sabha after obtaining the President’s assent, sources said.
The bill is likely to be introduced before the Lok Sabha adjourns for a month-long recess.
The government has been under pressure to act on the issue of black money stashed abroad as the BJP and Modi had mounted a huge campaign during the Lok Sabha election last year with promise to quickly repatriate such illegal wealth.
Individuals, entities, banks and financial institutions would be liable for prosecution and penalty if found abetting such offences.