The proposed black money law will have a rebuttal clause to ensure natural justice, a senior tax official has said.

Rebuttal will allow a party to present evidence to contradict or nullify other evidence that has been presented by an adverse party.

“We are going to build in a rebuttable presumption (in the black money law), even if we are going to prosecute you, the court will give you an opportunity to explain why you did not disclose (information to) the department,” Anita Kapur, Chairperson of the Central Board of Direct Taxes (CBDT), told reporters here.

The Centre proposes to enact a comprehensive new law on black money to deal with such money stashed abroad.

Tough law

The proposed Bill will be introduced in the ongoing session of Parliament. It will have a provision for imprisonment up to seven years for concealment of a foreign account, tax at the rate of 30 per cent, a penalty at the rate of 300 per cent of tax dues, and so on.

“Everybody will be given an opportunity. It is not that we are abandoning the principles of natural justice. Reveal your foreign assets, beneficiary interest, movable or immovable assets, whatever you have to disclose,” Kapur said, adding that a compliance window is being worked out.

There is apprehension that black money generated at home is higher. Sectors such as real estate and bullion are considered havens for generating domestic black money. Tax officials expect that implementation of the Goods & Services Tax (GST) will help in curbing such domestic black money.

“People try to evade local taxes rather than income tax. They don’t want to pay sales tax, they don’t want to pay value-added tax. With GST coming in and the process of credit through the value chain getting established…the incentive to not declare transactions will get minimised to some extent,” she said.

Exemptions and MAT

The Budget also proposes phasing out exemptions to corporate entities over a period of four years. The CBDT chief clarified that even after four years, there will be a few exemptions, especially those that have a sunset clause (to end on a particular date in the future) or are running.

She said phasing out exemptions could also mean an end to the Minimum Alternative Tax (MAT) system, but nothing could be specified now.

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