New Black Money law creating fear among the rich – industry chamber

PICNN8647The compliance window in the black money law has created more confusion and fear in the minds of the industry leaders, professionals, trading entrepreneurs, than giving any comfort of stress-free regime that treats the tax-payers with respect, the ASSOCHAM said.

India’s black money law has tough provisions for those found to be holding assets and money in fake names and accounts. It also has strict provisions to prevent Indians from stashing away illegal funds — such as those obtained through bureaucratic corruption and undeclared assets — in safe havens like Switzerland and Cayman Islands.

In fact, some of India’s richest families are reported to be moving out of the country, taking their money with them.

A deadline to disclose undeclared assets will run out in September, and many rich people are wondering whether to disclose such assets or not.

“Based on a wide range of consultations with a cross section of the tax payers, we found there is so much of a confusion and in some cases even panic for being on the wrong side of this law by non-compliance which may result from inadvertent steps,” a chamber note has pointed.

It said while the Finance Ministry has launched an exercise of educating through interactive sessions, it has not been able to create the kind of comfort level. Besides, “there is a feeling that immediately after the compliance window comes to end after September end, the tax personnel could be on a prowl. This is certainly not giving stress free business environment.”

Commenting on the developments, ASSOCHAM Secretary General Mr D S Rawat said, “there is so much of inter-face between Indian business persons, professionals, travellers, non-resident Indians with the rest of the world that one could be caught on a wrong side of the law by some silly mistakes on the part of the tax payers. There is no assurance that the tax authorities would not take a serious view of this silly mistake and not launch a criminal proceeding. That is really worrying”.

If the need be, let there be amendments in the law, based on more consultations, the chamber Secretary General said.

The chamber said while the Supreme Court appointed SIT has to be respected and the menace of black money must be eradicated, the ordinary business transactions should not become difficult to administer. We have situations of exporters’ remittances involving a very complicated route with currency issues, customs , drawback. Besides, the exporting firms need to create infrastructure abroad which require creating assets overseas. “It could so happen that for small and medium scale exporters, hiring experts in compliance may not be possible and feasible. That situation should not be allowed to become a taxman’s delight”.

A similar situation may arise for the NRIs who own properties both abroad and in their home country. Within the diaspora, there are a range of people and some of them are doing well but are not very well academically educated. They may find themselves trapped in a gullible and innocent manner.

The rules of the law must be clearly spelling out that honest tax payers and business persons should not be disturbed and not every foreign transaction should be treated with an eye of suspicion for imposing heavy of over 90 per cent with criminal ramifications.

“If the need be, let there be amendments in the law, based on more consultations”, the chamber Secretary General said.