New Delhi: A special voluntary disclosure scheme for bringing back blackmoney stashed away in tax havens abroad may be in the offing.
The CBDT is understood to be “seriously considering” recommending to the government a scheme on the lines of the Voluntary Disclosure of Income Scheme (VDIS) announced in 1996 to tap funds lying abroad for productive use in India.
Sources said the issue gained momentum recently when captains of industry and business met Finance Minister Pranab Mukherjee and impressed on him the need for encouraging disclosure of unaccounted money kept in tax havens which could be used to fund infrastructure projects in the country.
A proposal for ushering in a similar scheme was proposed earlier by an expert group on blackmoney to the government.
The thinking in the government comes in the midst of a raging debate over unearthing blackmoney and illegal funds parked abroad.
The Ministry is considering the formulation of a such a scheme in the backdrop of India receiving fresh information under Tax Information Exchange Treaties (TIEAs), DTAA and the OECD automatic exchange route.
Under the scheme in the making, according to sources, the source of money will not have to be disclosed but criminal action would be taken if the assets or money stashed pertain to proceeds of crime.
Official sources said committee on blackmoney headed by the CBDT Chairman is expected to discuss and decide on the proposal during its proposed meeting later this month.
Incidentally, an expert group on blackmoney had earlier suggested that an offshore voluntary scheme may be considered by the government to collect tax on undisclosed bank accounts and assets held by resident Indians abroad.
Experts on the subject said that such a scheme is prevalent and has been implemented in many European countries, the US, UK, Germany, France, Greece, Italy and Portugal among others.
Sources said that now that the country’s efforts to revive and implement the various tax treaties have started giving results, such a scheme could be operationalised as compared to the earlier practise where it was very difficult to obtain bank accounts and assets data of such a taxpayer.
The nitty-gritty of such a scheme and the amount of penalty etc on the disclosure of such funds stashed abroad could be worked at a later stage, the sources said.
The Central Board of Direct Taxes (CBDT) through the Income Tax department has taken several measures in the recent past to update the article concerning exchange of information in existing DTAAs to specifically allow for exchange of banking information and information without domestic interest.
India has also decided to negotiate TIEAs with priority countries and jurisdictions.
In the last two years, India has concluded negotiation of 16 TIEAs, 18 new DTAAs and renegotiation of 21 existing DTAAs.