Dissecting the IT amendment passed today
On a closer look at the IT amendment today it seems to be an excellent one, except for just a flaw if it be one.
1. Those of us who were wondering if criminals would escape with the blood money due to the amnesty, they may not succeed due to Revenue secretary Hasmukh Adhia making it clear "...there is no immunity from FEMA, PMLA, Narcotics, and black money act..." We still need to understand if IT department does not ask the source of the income, who does and when, to get suspicious account in legal ambit?
The Prevention of Money Laundering Act (PMLA), 2002 in Sec. 3 defines offence of money laundering as whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering.
Narcotic Drugs and Psychotropic Substances Act, 1985 provides for the forfeiture of property derived from, or used in, illicit traffic in narcotic drugs and psychotropic substances.
Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, or the black money act applies to both undisclosed foreign income and assets (including financial interest in any entity). Here undisclosed foreign income or assets is taxed at the flat rate of 30 per cent.
The objective of Foreign Exchange Management Act, 1999 (FEMA) is facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
2. Those who had concern about Black money generators stand to profit by this amnesty may be both right and wrong depending on case to case basis.
Professional like doctors, lawyers, CA etc may stand to lose because now they are paying 50% tax not 30% and the bank interest may not make up for the extra 20% if it is a short term accumulation, but if it was long term there may still be gains.
Legal business would actually have profited since the funds earned much more than 20% tax to be paid on amnesty.
Illegal/Criminal business obviously made much much more than legal business but they have the risk of legal action mentioned under point 1. Since the fund source will not be asked by IT and it is not clear how any other department will ever come to know about the disclosure, so Criminal business seems to be the biggest gainer in this amnesty.
On the whole the deal is definitely a good deterrent, though it may favour Criminalization just a bit more. more
1. Those of us who were wondering if criminals would escape with the blood money due to the amnesty, they may not succeed due to Revenue secretary Hasmukh Adhia making it clear "...there is no immunity from FEMA, PMLA, Narcotics, and black money act..." We still need to understand if IT department does not ask the source of the income, who does and when, to get suspicious account in legal ambit?
The Prevention of Money Laundering Act (PMLA), 2002 in Sec. 3 defines offence of money laundering as whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering.
Narcotic Drugs and Psychotropic Substances Act, 1985 provides for the forfeiture of property derived from, or used in, illicit traffic in narcotic drugs and psychotropic substances.
Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, or the black money act applies to both undisclosed foreign income and assets (including financial interest in any entity). Here undisclosed foreign income or assets is taxed at the flat rate of 30 per cent.
The objective of Foreign Exchange Management Act, 1999 (FEMA) is facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
2. Those who had concern about Black money generators stand to profit by this amnesty may be both right and wrong depending on case to case basis.
Professional like doctors, lawyers, CA etc may stand to lose because now they are paying 50% tax not 30% and the bank interest may not make up for the extra 20% if it is a short term accumulation, but if it was long term there may still be gains.
Legal business would actually have profited since the funds earned much more than 20% tax to be paid on amnesty.
Illegal/Criminal business obviously made much much more than legal business but they have the risk of legal action mentioned under point 1. Since the fund source will not be asked by IT and it is not clear how any other department will ever come to know about the disclosure, so Criminal business seems to be the biggest gainer in this amnesty.
On the whole the deal is definitely a good deterrent, though it may favour Criminalization just a bit more. more
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Mr Ganguly's has analysed the pros and cons of the act .It has its own holes to escape .But a good start how ever . more
Dec 02
THE PRESENT MONETRY REFORM TO BE FRUITFUL ONLY WHEN OUR LEGAL REFORM, ELECTION REFORM SUBSEQUENTLY CARRIED OUT TO INCULCATE FEAR TO THINK AND DO WRONG AND FOR THIS POLITICAL WILL A MUST more
Dec 02
Let's face facts. If only 5% of the earning population has until now been paying income tax, then it is high time that this figure finally rises to 100%. Other countries of the world have it. Why should this not be applicable to India; where's the problem? The government with decision on demonetization has spelt out the first step. Help your government! more
Dec 01
I personally feel the bigger currency should be demonetized at regular interval, so no one can stack. Criminal activity can be reduced to larger extent more
Dec 01
@ J Dua: I feel PMGK is political nonsense and hoodwinking the public. Tell me when 100% of money value could have been used for the national development, why does Modiji want to settle for 50%? And who benefits from the amnesty? The very Mafia and Terrorists amongst other criminals we are supposed to be fighting against. This is SICK, not expected of BJP & Modiji! more
Nov 30
