Tax evasion may be a criminal offence
In a throwback to the past, the committee on black money is considering making tax evasion a criminal offence.
The committee headed by Central Board of Direct Taxes ( CBDT )) chairman Prakash Chandra , which held its first meeting on Thursday, will examine the proposal, a government official who did not wish to be identified said. Though the suggestion has come in the past, the department stayed away from such a move in the wake of public uproar.
But given the pressure on the government to crack down on black money, the proposal is back on the table though it might require amendment to the law. The official said the move would create a strong deterrent as evaders simply pay tax and penalty and walk away since it's a civil offence at present.
In the past, government had provisions under laws such as Fera to put offenders behind bars even for minor offences. Given the misuse and economic liberalization that led to several controls on foreign capital vanish, the government repealed it and replaced it with Foreign Exchange Management Act (Fema). The review is being initiated along with a fresh look at Fema, Prevention of Money Laundering Act and those dealing with indirect taxes, the official who was present in the committee's meeting said.
Members of the committee were also of the opinion that instead of enacting a fresh law to deal with black money, a better option would be to plug the gaps. "The idea is to identify loopholes and plug them, wherever needed. If we still find deficiencies, then we will examine the possibility of a new law," the official added.
Given the pressure on the government to act on black money and corruption , the committee headed by Chandra has decided that government agencies would exchange notes in around 10 days and work out the basic structure by the end of June so that the sixmonth deadline is met.
An official, however, clarified that the committee was not looking at generation of black money in the economy, which is being dealt with by a separate panel. Over the last few weeks, the finance ministry has been moving at full speed and has set up at least three committees related to generation of illicit wealth besides roping in experts to estimate the extent of black money in the economy.
