The issue of black money, unearthing which was a major election promise of the Bharatiya Janata Party, figured prominently in Jaitley's speech.
BJP president Amit Shah said the steps will effectively check black money. Congress spokesperson Rajeev Gowda said the measures can be useful only in the long term, and little had been done to fulfill the pre-poll promises made by the BJP. Giving details of the measures in the proposed bill on money stashed abroad, Jaitley said that not filing income tax returns or filing them with inadequate disclosures would lead to rigorous imprisonment of up to seven years. Undisclosed income from any foreign assets would be taxable at the maximum marginal rate. It also becomes mandatory to file returns vis-a-vis foreign assets.
If an offence is detected, banks, financial institutions and individuals will all be liable for prosecution and penalty. Concealment or income or evasion of tax in relation to a foreign asset will become an offence under the Prevention of Money Laundering Act (PML Act), 2002, the minister said. The definition of 'proceeds of crime' under PMLA would be amended to enable attachment and confiscation of equivalent asset in India where the asset located abroad cannot be forfeited.
The Foreign Exchange Management Act (FEMA) would also be amended. Jaitley outlined the steps taken by the Narendra Modi government since it took power last year and also the steps being planned to tackle black money stashed abroad -- and generated within India. Amendments have been proposed in the Income Tax Act prohibiting acceptance or repayment of advance in cash of Rs.20,000 or more for any transaction in immovable property. Violation would invite penalties of equal amount.
It would become mandatory to quote the Permanent Account Number (PAN) for any purchase or sale exceeding Rs.1 lakh.
He said false declaration in any business relating to customs will "be predicate offence" under the Money Laundering Act.
The minister said black money eats into the vitals of the economy and society and the problems of poverty and inequity cannot be eliminated till the problem was firmly dealt with. "Investigation into cases of undisclosed foreign assets has been accorded the highest priority, resulting in detection of substantial amounts of unreported income," Jaitley said.
He said a new structure was being put in place including electronic filing of statements by reporting entities to ensure seamless integration of data and more effective enforcement.
"Tracking down and bringing back the wealth which legitimately belongs to the country is our abiding commitment to the country," he said to loud thumping of desks by the treasury benches. Referring to the proposed bill on benami transactions, he said it would enable confiscation of benami property and provide for prosecution.
It would block a major avenue for generation and holding of black money in the form of benami property, especially in real estate.
Shah said the budget will help check black money. "Solid steps have been taken against those stashing black money in India and abroad," he said. Congress leader Gowda said the measures announced by Jaitley "may be useful in going forward in the future" but not in "fulfilling the promises already made including bringing Rs.15 lakh in each account."