India: India launches new tax evasion amnesty scheme to unearth unaccounted cash

Author(s): Rajesh Kumar Singh | Date: November 28, 2016 | Language: English
Source: http://www.channelnewsasia.com/ | URL: https://goo.gl/Egn5EN | Type: Text

Indian Finance Minister Arun Jaitley on Monday unveiled a scheme to give tax dodgers another chance to come clean, as he sought to bring billions of dollars worth of undeclared income into the mainstream economy.
The move follows Prime Minister Narendra Modi’s decision to scrap 500-rupee and 1,000-rupee banknotes in a bid to flush out cash earned through illegal activities, or earned legally but never disclosed.
Under the proposed scheme, a person making the declaration would have to pay 50 percent in taxes and surcharges. The individual would also have to park a quarter of the total sum in a non-interest bearing deposit for four years.
While Jaitley expects the scheme to discourage tax evaders from laundering their ill-gotten wealth, experts said there was no better alternative to sweeping tax reforms.
“Since it offers clarity on how unaccounted cash will be taxed, it can help in cleaning up the cash economy,” said Vishal Malhotra, a tax partner at Ernst & Young.

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