Government to take strict steps to eradicate black money menace from its root

In a stern message on black money, Finance Minister Arun Jaitleyhas said the government is targeting to weed out the root causes of this menace and a one-time compliance window will be announced in the next few days for those with undeclared assets abroad to come clean.

"The government is taking a number of steps to compress the flow of black money. The most important step...is to weed out the root causes," Jaitley said.

While a new law will come into effect from April 1, 2016, to tackle the black money menace, the government is in the process to put in place a compliance window for those with undeclared assets abroad to come clean by paying the penalty.

"The time frame of the compliance window would be announced very shortly. We are in the process of consultation (on the time frame)," Jaitley told PTI in an interview here.

Jaitley, who has held a series of meetings with businesses, investors and the government officials during his US trip, said the government has begun taking strong action on black money.

"We have got a law passed by Parliament where illegal assets and accounts kept abroad will be penalised. So I will impose a tax on that," he said.

"I am going to announce in the next few days a compliance window that within so many days, disclose the assets, pay the tax plus penalty. And if you use that compliance window, you pay the tax, penalty and get out," Jaitley said.

"But if you do not use the compliance window and thereafter if you are caught, because the world is now moving towards an automatic disclosure, you are not only going to pay a much higher level of penalty, but you also would be prosecuted," the Minister said.

Jaitley said the new law has created a fear psychosis in the mind of the tax evaders.

"The same set of people who would get up and say take action against black money would now say this is too draconian. But this is one law, which I am not going to relent neither the Prime Minister will," he said.

On domestic black money, Jaitley said the government has announced that any cash transaction over Rs 20,000 would be prohibited for property deals.

"I am also going to very shortly announce that if you pay by cash beyond a certain limit -- the limit has to be announced -- giving your PAN card is necessary," he said.

Jaitley said a number of delegations have met him on this issue where people have opposed this move, "as if transaction in black money is a fundamental right". "The world is changing. If you pay taxes, then it enables the government to reduce the level of taxes. India is also on the forefront of the entire G-20 effort for automatic transmission of information.

"We would be signing the agreement with the United States FATCA for automatic sharing of transaction related to Indian citizens by the US and other countries that are going to sign FATCA. These are all very tough measures we are announcing," he said.

"The present government in India is willing to talk not only with its own businesses and investors, but is also reaching out to international investors and people of Indian origin who can be of great utility in India growth story," Jaitley said.

"Probably the eye opening experience has been in the Silicon Valley. It is an area where you see the virtues of technology being converted into commerce, where entrepreneurship is at its very best where convergence of entrepreneurship and technology has been enabled with a great Indian participation.

"It also answers the question that it pays to be innovative, pays to invest in education, it pays to invest in technology and more important that it is pays for a country to unshackle the energy of people," he added.

On his last day in the US, Jaitley also met the California Governor Jerry Brown and addressed an event organised by the Indian industry body CII and TiE in Palo Alto, California.