No amnesty for stash cases under probe

10 year jail, 90% penalty for concealing black money abroad

The 1,200 Indians who allegedly have accounts in HSBC Bank's Geneva account and against some of whom a probe was initiated by tax authorities can't get amnesty under the new law

Whistleblower offers to help

As the government promises a new black money bill in the current Parliament session, a former employer of the world's largest private bank, UBS, has told NDTV he can give India valuable information for its black money probe.Bradely Birkenfeld, 50, the high-profile whistleblower, was rewarded $104 million by US authorities for revealing secrets of Swiss banking.In an exclusive interview to NDTV, Birkenfeld told said India should ask whistleblowers for advice on the new black money laws being planned. He said he'd like to help the Indian black money probe free of charge.

Birkenfeld, who was a director with UBS in Zurich in 2005, had reported illegal activity in the bank. His information on 19,000 clients who put away $19 billion had helped the US force Switzerland break banking secrecy laws to give details on more than 4,500 American clients in 2009.The event led to a huge debate across the world about banking secrecy that helps shield money laundering and tax evasion on an industrial scale.

In US courts, he admitted that he smuggled diamonds once for a client in a toothpaste tube, revealing how bankers often "shop" for ultra-rich clients and provide them with concierge-like services.Birkenfeld was sentenced to 40 months in jail as he was found guilty of withholding information about one of his former clients. But he was released early and is on parole until November 2015.

The chapter on tax compliance takes the effective rate of tax, plus penalty, to 60 per cent of the declared assets, leaving room for people to retain only some of such money

New Delhi: A bill on unearthing black money and punishing those with ill-gotten wealth was tabled in the Lok Sabha on March 20, the last day before Parliament went into its scheduled month-long recess.The Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, proposes a short window to overseas income tax assesses to declare their assets, pay tax and a penalty and thus avoid imprisonment. It provides for a maximum of 10 years' rigorous imprisonment for evading tax on foreign assets.

However, the 1,200 Indians who allegedly have accounts in HSBC Bank's Geneva account and against some of whom a probe was initiated by tax authorities can't get amnesty under the new law.The so-called amnesty scheme is detailed in the chapter on tax compliance for undisclosed foreign assets of the proposed legislation. But Section 71 lists the cases where the provisions of this chapter shall not apply and the accounts held illegally in the HSBC account fall under it.

The said chapter clearly says it shall not apply, where: Notice has been served on a person for such cases under the Income Tac Act; Search has been conducted and a notice has been issued that is still valid; and information has been received by the government from a competent authority under a formal pact. The amnesty scheme is to apply from the date when the new act comes into force, which is proposed from April 16 next year, till such date the government notifies its applicability in the official gazette.

India has no official estimates of illegal money stashed away overseas, but the unofficial ones range from $466 billion to $1.4 trillion. The amnesty provisions in the proposed legislation to bring back ill-gotten money stashed away by Indians abroad will allow a perpetrator to retain only 40 per cent of the overseas asset if declared within the stipulated time.In the chapter on tax compliance for undisclosed foreign income and assets, Section 60 provides for a tax to be charged at 30 percent of the undisclosed assets outside India that has been since declared under the act.Section 61 additionally provides for a penalty at the rate of 100 percent of such tax, taking the effective rate of tax, plus penalty, to 60 percent of the declared asset, leaving room for people to retain only some of such money. (Agencies)