Look Who's Talking: Arun Jaitley's Comeback On 'Fair And Lovely' Jibe

New Delhi: Finance Minister Arun Jaitley today defended his government's new black or untaxed money scheme announced in the Budget last week, saying "its not an amnesty scheme, it has a penalty."

Speaking in the Rajya Sabha, the minister also attacked the main opposition Congress party, whose leader Rahul Gandhi tore into the government last week over what he called the "fair and lovely scheme."

"When you make comments on steps we are taking from foreign black money to domestic black money to filing prosecutions and assessments, please honestly compare your own track records in this regard," Mr Jaitley said, recalling an income disclosure scheme announced in 1997 by the then Congress government and its finance minister P Chidambaram.

"In 1997, you said, please make declaration of undisclosed income by just paying 30 per cent tax and nothing more, and declare it at the 1987 value. Most declarants were children and women. The immediate effect was that there was no buoyancy in tax collection next year," Mr Jaitley said alleging that the proposal had led the honest tax payer to the courts.

"We have told people if you have any income which has escaped assessment, declare it today, over and above the tax as of the market value today, pay a 50 per cent penalty. So this is not an amnesty scheme, in which there is a 50 per cent penalty," the minister said.

Rahul Gandhi has repeatedly attacked the government since the Budget announcement last week. "Those who have black money can pay some tax and simply convert it into white. It's a Fair & Lovely scheme", he had said in the Lok Sabha during the debate on the motion of thanks on the President's address.

Delhi chief minister Arvind Kejriwal of the Aam Aadmi Party had tweeted, "BJP vowed to bring back black money thro enforcement, not thro amnesty schemes. This is wat Chidambaram also did. What is the difference? (sic)"

Both the opposition leaders had accused the government of offering amnesty to tax evaders, but punishing the honest salaried class by proposing to tax withdrawals from the Employees Provident Fund, a retirement benefit fund.

Earlier today, Mr Jaitley announced in Parliament that the government is withdrawing the new EPF tax and will conduct a "comprehensive review" of the proposal.