New Delhi: The Undisclosed Foreign Income and Assets bill, which provides for heavy penalties for those stashing away black money in foreign accounts, was passed in the Lok Sabha today.
The government had introduced the black money bill in March.
The bill provides a window to those with funds abroad to come clean by paying tax, interest and penalty. For those who refuse to do so, the bill has provisions for rigourous punishment, including a jail term of 3-10 years.
A time-frame will be provided as a "compliance window for declaring and paying penalty," said Union finance minister Arun Jaitley while replying to the debate on the bill.
"Unlawful, undisclosed income abroad has been taxed under this law at a tax rate of 30% with an additional 30% penalty," he said.
Failure to meet the compliance timeline will attract an additional penalty of 90% for a total tax liability of 120 percent on the quantum of black money abroad.
Once passed, the law, the minister said, will help bring black money into economy, improve tax collections and thereby, eventually help lower tax rates.
The bill, the minister clarified, was meant to specifically target black money stashed abroad. A separate benami bill will soon be brought before Cabinet to tackle domestic black money.
India has no official estimate of illegal money stashed away overseas, but unofficial assessments put it somewhere between $466 billion and $1.4 trillion.