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Banks, FIs to face action under new black money law, says Revenue Secretary

The new law will not only target the perpetrator of the crime, but also the "arbitrator, the abettor and the beneficiary", Revenue Secretary Shaktikanta Das said.

twitter-logo PTI   New Delhi     Last Updated: March 4, 2015  | 16:12 IST
Banks, FIs to face action under new black money law, says Revenue Secretary
Photo: Reuters

Under the new law on black money, banks and other financial institutions will also face action if they are found to have abetted stashing of illicit wealth, along with the action against the perpetrators and beneficiaries of this crime.

The new law will not only target the perpetrator of the crime, of holding or generating black money, but also the "arbitrator, the abettor and the beneficiary", Revenue Secretary Shaktikanta Das said on Wednesday.

The comments assume significance in view of the charges being faced in India and elsewhere by global banking major HSBC for allegedly helped individuals in parking ill-gotten wealth in Switzerland.

"... The new legislation will deal with perpetrators of the offence of black money, as also the abettor and the beneficiary," he said, while adding that the perpetrators could be individuals entities or institutions, while abettors could be banks or financial institutions.

Finance Minister Arun Jaitley announced in the Union Budget on Saturday that the government will frame a new law to check the black money menace and a bill in this regard would be presented in the Parliament during the current session.

The law would provide for hefty penalties and imprisonment of up to ten years.

Speaking at an event organised by industry body Assocham (The Associated Chambers of Commerce and Industry of India), Das said that the black money law will be a very comprehensive piece of legislation, but added that the intention is not to create an environment of fear.

"We would expect our banks and financial institutions to be very reposnible... If we find there is an element of abetment provided by these institutions, naturally, that will attract provisions of the law," he added.

"We want to have a non-adversarial tax administration. We do not want to do anything which vitiates the investment climate or which vitiates the ease of doing business or which affects businessman, industry and other people in carrying on their normal business activity," he said.

The government will also give a one-time 'short window' to the holders of black money abroad to declare their wealth, pay taxes and penalty and escape prosecution under the proposed stringent law to deal with the menace.

The only advantage under the scheme would be an escape from prosecution. The source of income would have to be declared which would be throughly scrutinised, Das said.

"A one-time compliance window for a limited and short period of time will be given... The duration of short period will be worked out, will be specified in due course of time," he said.

Talking about various provisions made in the Union Budget 2015-16, Das said that the overall focus was on reviving growth and it was aimed at job creation.

"India is a young country and would remain young country for the next 50 years", he said.

On reduction of corporate tax from 30 per cent to 25 per cent over the next four years, Das said it will leave additional money in the hands of industry to make more investment and create jobs.

Speaking at the same function, CBDT chairperson Anita Kapur said that the intention of tax authorities is to reduce litigations and encourage investment.

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