Suspected tax dodgers declared Rs 65,250 crore in hidden wealth in India as the Centre’s four-month compliance window ended on Friday, yielding Rs 29,362 crore to the government in taxes.
Suspected tax dodgers declared Rs 65,250 crore in hidden wealth in India as the Centre’s four-month compliance window ended on Friday, yielding Rs 29,362 crore to the government in taxes. Half of this tax revenue will accrue this fiscal itself, and will be spent on public welfare schemes, finance minister Arun Jaitley told reporters on Saturday.
Black money declarations under the Income Declaration Scheme (IDS) will go up once all the online and manual filings of undisclosed assets are compiled. The government did not name any of the 64,275 declarants.
The Centre had offered a one-time chance to holders of untaxed incomes and assets to escape prosecution by coming clean and paying — in installments by September 30, 2017 — tax, penalty and cess totalling 45 per cent of the assets disclosed.
Private wealth management firm Ambit Capital in a report in May 2016 estimated India’s black economy at Rs 30 lakh crore. This will mean the current declarations are just 2.17 per cent of the total hidden wealth in India.
“I think it is a good figure.... This money will go to the Consolidated Fund of India, and will be collectively used for public welfare,” Mr Jaitley said. Reports said that the highest declarations under the scheme launched on June 1 came from Hyderabad, followed by Mumbai, New Delhi and Kolkata.
Prime Minister Narendra Modi called the outcome of the scheme “successful”, and said it was “a great contribution towards transparency and growth of the economy.”
The Centre had sent out around 700,000 notices earlier this year to suspected evaders. Income tax department offices were open till Friday midnight to allow people to make declarations.
Under the Voluntary Disclosure of Income Scheme (VDIS) launched by then UPA’s finance minister P. Chidambaram in 1997, the government had received 4.75 lakh declarations and tax revenue of Rs 9,760 crore.
However, in that scheme, those making declarations were given the discretion to value their assets, like gold and real estate, at back-dated rates. There were allegations that the scheme led to large-scale under valuation of assets.
Mr Jaitley said both schemes are different and cannot be compared. While IDS is not an amnesty scheme, VDIS provided blanket amnesty, he said.
“IDS’ tax rate was 45 per cent. In case of VDIS, it was 30 per cent, but effectively it was close to single digits because the assets were assessed as per their value in 1987 and not 1997,” Mr Jaitley said. In the current scheme, those declaring assets had to asses them at their current market value.
Mr Jaitley also listed out steps taken in two years to unearth unaccounted money, including Rs 56,378 crore during search operation and Rs 16,000 crore from non-filers of tax returns.
Last year, under a similar scheme for black money stashed abroad, 644 declarations were received, yielding Rs 2,428 crore in taxes.
Black money has been an intense political issue in India. PM Modi had during the 2014 elections pledged to bring back billions of dollars in black money if elected.