Government is soon expected to notify a “small time” compliance window for those holding undeclared assets orblack money abroad to voluntarily declare these to the taxman and come clean.
Sources said the window period could be notified by the end of this month or by early July and the time given could be as short as two months.
“A team of Central Board of Direct Taxes (CBDT) is working on the draft of the proposed compliance window. After vetting from the Department of Revenue it will be sent to the Finance Minister’s office for final approval,” the sources said.
They added the window could be kept “as short as possible” as a ‘trend analysis’ of the subject has shown that the target audience for this special exercise would not be a very large base.
“The compliance window to declare overseas black money or unreported income is expected to be a short and quick affair. A two-month time period is being thought to be enough for the person wanting to avail the one-time facility and also for the taxman to process it,” they said.
Sources added the Finance Ministry is working to notify the compliance mechanism by the “end of this month or the first half of July.”
It is also understood that the CBDT is in touch with the Special Investigation Team (SIT) on black money to decide the eligibility of seeking the compliance window help in those cases where the taxman and other enforcement agencies have deployed their scanner and started probe or issued notices based on some evidence.
The CBDT and senior officials of the Income Tax department are also mulling to see if two-four nodal centres could be created for admitting such cases from across the country.
“An opinion has been sought from the investigation and intelligence set up of the I-T department in this regard,” they said.
These procedures are being planned in the run up to the full operationalisation of the new anti-black money Act– Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Bill, 2015– from April 1, 2016 which was approved by Parliament early this year.
Finance Minister Arun Jaitley had said in the Lok Sabha that there would be a short compliance window for persons having undisclosed income abroad to come clean by paying 30 per cent tax and 30 per cent penalty.
Once the compliance window closes, anyone found having undeclared overseas wealth would be required to pay 30 per cent tax, 90 per cent penalty and face criminal prosecution.
The new law would not cover those having amounts to the tune of Rs 5 lakh in bank accounts abroad as it may belong to students or those working professionals.
Also, the latest law will deal with foreign assets and not domestic tax evasion which was being taken care of by the existing Income Tax Act.