With the Union Budget proposing a new law on black money, accounting regulator ICAI has said that chartered accountants can play an effective role in curbing the menace. A comprehensive law to check black money stashed away abroad would be introduced in the current session of Parliament that will provide for 10-year imprisonment for hidng foreign assets, along with a host of strict measures.
“Stringent penal and prosecution provisions are in the right direction to deal with black money and its concealment with effectively and forcefully,” the Institute of Chartered Accountants of India (ICAI) President Manoj Fadnis said. “Chartered Accountants can play an effective role in curbing the black money in tandem with the spirit of the Budget,” Fadnis added.
Presenting his first full-year budget, Finance Minister Jaitley yesterday said the first and foremost pillar of his tax proposals is to enacting a new law to effectively deal with the problem of black money which eats into the vitals of our economy and society. 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. Further, the offence will be made non-compoundable and the offenders will not be permitted to approach the Settlement Commission.
Non-filing of return or filing of return with inadequate disclosures would be punishable with rigorous imprisonment of up to seven years. As regards curbing domestic black money, a new and more comprehensive Benami Transactions (Prohibition) Bill will be introduced in the current session. Fadnis noted that real estate “had been a significant contributor to generation and holding of black money in the form of benami property”.
The law would enable confiscation of benami property and provide for prosecution, thus blocking a major avenue for generation and holding of black money in the form of benami property, especially in real estate. “Through these strong measures, the Finance Minister has aimed to keep a tight check on black money. This would go a long-way to prevent tax leakage,” Fadnis said. Another domestic agency Care Ratings termed the fiscaltargets as “pragmatic” given the need to grow faster and stressed that the glide path to the medium term target of 3 per cent has been maintained.
The Budget is pro-growth and the government seems to be keen to expedite the growth story with public investment, it said. “The creditable part of this exercise is that it has been accomplished by being pragmatic with the level of fiscal deficit which will be at 3.9 per cent for the year even though the glide path to 3 per cent is still on the agenda,” its managing director DR Dogra said.
He however, pointed out that in his calculations, Jaitley has pegged an ambitious divestment target of Rs 69,500 crore, even though the previous fiscal’s target of Rs 43,425 crore is expected to fall short by 49 per cent. “Hence, it remains to be seen if the optimistic target is realised in FY16,” it said.