Govt’s black money window fails to meet expectations, nets just Rs 3,770cr

NEW DELHI: The government managed to get 638 declarations under the three-month compliance window for declaring undisclosed foreign assets that closed on Wednesday, with the total declarations adding up to only Rs 3,770 crore. Though the Centre had not disclosed any target, the mop up will be less than Rs 2,300 crore in taxes in the best case scenario, below expectations given that similar schemes in the past had generated much more interest.
READ ALSO: Centre vows to step up black money drive
PM’s election claims were hollow: Cong
The lackluster response gave the opposition an opening to renew its charge that Modi government had failed to fulfill his promise to recover black money which has been taken abroad.
The scheme provides those making disclosures to pay 30% tax and an equal amount as penalty before the provisions of the new black money law kicks in. The law entails for stiffer penalties, including up to 10 years in prison for those with undisclosed foreign assets.
READ ALSO: Rush of black money declarants peak before deadline
Tax analysts blamed the revenue department for not providing adequate comfort to those who wanted to come clean. “There was neither certainty that the declaration would be accepted, nor was there any assurance of immunity from prosecution (other than those provided under five laws), which deterred a lot of people,” said a consultant with a leading firm. A major concern was that the government may not accept the declaration citing information that it had received under a Double Taxation Avoidance Agreement about an individual wanting to opt for the scheme.

The head of tax practice at a global consulting firm said that the tax department’s threat of getting information from foreign governments was not convincing enough to prompt those with undeclared overseas wealth to opt for the one-time window. Besides, they said that the clarifications kept coming till the last minute.
READ ALSO: Govt opens 90-day window to declare black money abroad
The muted response to the scheme also provided fodder to opposition parties who were already targeting Modi government for its alleged failure to deliver on its promise to bring back black money stashed abroad. Congress spokesman Randeep Surjewala referred to Modi's election campaign speeches in which he had reportedly said that black money to the tune of Rs 80 lakh crore was hoarded abroad and his government would bring it back in 100 days of coming to power and had indicated that Rs 15 lakh would flow into the bank account of every Indian. “What we have today after the passage of black money bill and 16 months of NDA government taking over is only Rs 3,770 crore,” the Congress speokesperson said.
Questions were also raised about Prime Minsiter Narendra Modi’s comment in his independece day speech that there had been disclosures to the tune of Rs 6,500 crore. The government, however, clarified that the PM was referring to collections through the normal route, a majority of which related to the HSBC cases. Hitting back at critics, finance minister Arun Jaitley said that “that Rs 6,500 crore was different. This (Rs 3,770 cr) is different”.
READ ALSO: Poor response to black money amnesty so far
Critics also drew parallels with the Voluntary Disclosure of Income Scheme which fetched nearly Rs 10,000 crore in taxes for the government. However, N K Singh who was revenue secretary in 1997 when the VDIS was implemented rejected the comparison. “It is like comparing apples with oranges”, said Singh who is now with BJP.
Government officials defended the way the scheme was implemented and comforted those who had opted for it, promising that they would not be harassed. “It was a window of opportunity to them to make declaration about their assets or investments in foreign country, and we have stuck to it. We have closed the window now. Whatever declarations have been made by them we accept, and those are the ones who would not be harassed at all,” revenue secretary Hasmukh Adhia said.
READ ALSO: Black money compliance window to end tomorrow
Central Board of Direct Taxes chairman Anita Kapur said the government could only make laws and give an opportunity for people to take advantage of that. “We clarified a lot of queries of people. We also facilitated their filing till midnight, as we got some last minute requests from places other than Delhi ... It is for the persons who have assets abroad, and their conduct is not under our control, to take advantage or to ignore the opportunity,” she said.