If you are an extremely rich ‘businessman’, with international links and multiple channels of making moolah, without a boy-scout’s conscience for clean accounts and tax-paying, then this article isn’t for you. Simply put, black-money holders are parasites. Not only do they deprive a country of tax revenues but they also keep utilizing the social benefits meant for all citizens of a country, without any contribution. Black-money holders have been outsmarting tax authorities for years; using law against law, exploiting loopholes, and evading taxes. They are nourishing their pockets at the expense of the good people, the taxpayers of the nation.

The problem of these economic parasites has turned into an epidemic in India. It’s tough to believe but approximately 3.5 crore Indians pay income tax, and the ones within the Rs 1 crore income group and above amount to less than 50,000 taxpayers. This is where the Government needs to step in and reward those who pay taxes on time and punish those who evade them. Stole your words, right? PersonalFN has always suggested its readers to pay taxes regularly and file returns in time.

Revelations of the vice-chairman of Special Investigation Team (SIT) Arijit Pasayat are telling. While speaking to media recently he said, “The volume of black money stashed in India is now much more than there is in other foreign countries.” Although it’s an open secret, his admission carries a lot more weightage.

As the old adage goes—Fool me once, shame on you; fool me twice, shame on me.

Black money holders have hindered India’s progress for years. To cure India, the Central Government seems to have prescribed a heavy dosage this time. The Government is working in coordination with many of its departments. The message is clear—Grab the black money back.

A quick look at what measures have been prescribed:

Central Board of Direct Taxes (CBDT) is expected to prune tax rules, which includes…
 

• Making it mandatory to quote PAN numbers for a set of transactions;


• Broadening the scope of Annual Information Returns (AIRs) furnished by third-parties such as banks and mutual funds, to obtain more data;


• Scrutinizing the production details provided by companies along with their tax returns (as it is in the case of mining).


 

It is believed that, more information on financial transactions by people (quoting of PAN) and meticulous reporting by the third party (such as banks, insurance companies, and mutual funds) may prove to be very effective in two ways. These are:
 

1. It will impede the flow of black money, (at least to an extent)
2. And also assist the Government create a large database to curb tax evasion.

 

Currently, quoting your PAN number is compulsory while making cash deposits with a bank exceeding Rs 50,000. You also have to provide PAN details if you pay Rs 50,000 towards life insurance premium. Similarly, banks have to report all deposits exceeding Rs 10 lakh under A.I.R.s; and credit card companies are required to give details of all card holders paying bills of Rs 2 lakh or more in a year. When it comes to immovable property, registrars have to report property transactions involving Rs 30 lakh or more. And the list is not exhaustive.

With the Government tightening their noose, transactions to be reported under A.I.R.s are likely to go up. Furthermore, the monetary limit set, where quoting PAN number will be mandatory, is expected to be leveled out; lowered wherever it is higher and vice versa.

On the horizon: Is Government doing enough?

PersonalFN is of the view that although measures taken by the Government may curb the flow of black money to an extent, many more measures are required before tax revenues can go up in a substantial manner. Truth of the matter is black money is often stashed away in real estate. Isn’t it a mystery that property prices aren’t being lowered despite the high inventory developers hold at present? The Government will have to figure out how to reclaim monies from the real estate sector.

Lately we’ve been seeing advertisements from banks encouraging patrons to use their debit cards for their myriad daily needs. The Government has been trying to discourage the use of cash and provide more channels to use plastic money as an alternative. However, the problem here is, it’s still optional for sellers and buyers to use cash while transacting. Moreover, if the Government really wants to discourage the use of cash on a broader level, why not propose to remove Rs 1,000 notes from public circulation?

Previously elected Governments too claimed to have fought against black money, and we’ve seen the outcome. Remember the NDA Government has come into power to execute some tough decisions. The ‘common man’ and honest taxpayers can only hope that the adage “being fooled twice” isn’t proved right.

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