From Vivek Kaul’s Diary (IND) – In the budget speech finance minister Arun Jaitley made on February 29, 2016, he proposed: “a limited period Compliance Window for domestic taxpayers to declare undisclosed income or income represented in the form of any asset and clear up their past tax transgressions by paying tax at 30%, and surcharge at 7.5% and penalty at 7.5%, which is a total of 45% of the undisclosed income.”
So, if you have black money, and are willing to pay 15% extra to the government, over and above the top tax rate, the laws of the land won’t apply to you. As Jaitley further said in his speech: “There will be no scrutiny or enquiry regarding income declared in these declarations under the Income Tax Act or the Wealth Tax Act and the declarants will have immunity from prosecution. Immunity from Benami Transaction (Prohibition) Act, 1988 is also proposed subject to certain conditions.”In an interview to the national broadcaster Doordarshan, Jailtey later said: “It’s not a VDIS (Voluntary Disclosure of Income Scheme) and it is not an amnesty.” Like a good lawyer, he did not specify what the scheme really is.
So what does the word amnesty mean? I looked for and managed to find my fifteen-year-old The Compact Oxford Reference Dictionary. The dictionary lists out two meanings for the word amnesty. Here are the two meanings: a) an official pardon for people convicted of political offences. b) a period during which people admitting to particular offences are not prosecuted (the italics are mine).
As Jaitley said during his budget speech: “We plan to open the window under this Income Disclosure Scheme from 1st June to 30th September, 2016 with an option to pay amount due within two months of declaration.”
Hence, anyone admitting to having black money during this period and paying the tax, the surcharge and penalty on it, will not be prosecuted under the laws of the land and will have immunity. This is precisely the Oxford Reference Dictionary’s meaning for amnesty – a period during which people admitting to particular offences are not prosecuted.