Budget 2012: Govt tightens screws on black money generation

It’s an all-out war on black money. Facing criticism for not doing enough to stop the menace, the government on Friday announced a slew of measures to prevent generation and circulation of black money and to make it more difficult to stash undeclared income abroad.
Finance minister Pranab Mukherjee said he planned to introduce a white paper on black money in the current session of Parliament.
The government plans to amend Section 149 of the Income Tax Act to allow for reopening of I-T return filings up to 16 years, from six years now. This amendment is expected to come into effect from July 1, 2012. Under the current provisions, the time limit is 6 years but tax authorities say it takes much longer to gather information on assets located outside India.
The finance minister also plans to make filing of I-T returns mandatory for every resident having any asset located outside India (including financial interest in any entity) or signing authority in any foreign account.
“Furnishing of return would be mandatory irrespective of whether the resident taxpayer has taxable income or not,” the finance bill says. This amendment will take effect from April 1, 2012, and will apply to the 2012-13 and subsequent assessment years.
In order to curb the practice of laundering money by taking advantage of the basic exemption limit, the finance bill proposes to levy a 30% tax on unexplained credit, money, investments and expenditure that is deemed as income under Sections 68, 69A, 69B, 69C or 69D. This levy will be irrespective of the slab of income. “No deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of the Act in computing income under the said sections,” the finance bill said.
The government also plans to strengthen the penal provisions on undisclosed income found during a search. It plans to expedite prosecution proceedings under the IT Act. The finance bill also said that share premium in excess of the fair market value would be treated as income and this amendment would come into effect from April 2013.
Budget 2012
Budget News 2012