Finance ministry to reopen assessments of taxpayers with secret foreign assets
The finance ministry is considering reopening assessments of taxpayers found to possess undisclosed foreign assets and bank accounts to up to 16 years as against six years now.
"We are examining allowing opening up of reassessment to up to 16 years to verify older information and establish money trail, it is necessary to have a provision for opening of older assessment," said a finance ministry official.
A government panel on black money has pitched for reopening assessments of such taxpayers as part of the measures to tackle black money. The official explained that such a law will also help the government secure information under its revised tax treaties such as the one with Switzerland.
The revised DTAA with Switzerland will be effective from January 1, 2012, for Switzerland and April 1, 2012, for India. The revised treaty will be operational from prospective effect. The government may consider amending the income tax law to bring in such a provision, the official said.
It may also be brought in under the new direct taxes code when it is taken up by the Parliament for passage. Such taxpayers found with unexplained investments would face penalty up to 300%, tax, interest and prosecution.
Countries, including the US, allow taxmen to reopen assessments for up to 10 years. The issues of black money and corruption have taken centrestage in the political debate with Anna's fast galvanising public opinion.
However, Baba Ramdev's demand of capital punishment for perpetrators of black money has not found favour with the law ministry. Gross direct tax collections rose by 23% to Rs 2,57,042 crore in the first six months of 2011-12 as against a growth of 15.51% in the first half previous fiscal.
The mop up has been better over the last fiscal due to growth in tax deducted at source collections.
Source: Economic Times
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