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Q. Amnesty scheme for taxpayers: Discuss the impact of government's amnesty scheme for taxpayers to declare undisclosed past income.
Oct 04, 2016 Related to : GS Paper-3

Ans :

Introduction-

Earlier this year central government has announced amnesty scheme for taxpayers to declare undisclosed past income within a prescribed time period. The intent of the scheme is to encourage tax evaders to make use of the current amnesty scheme for tax evaders. The scheme was open until 30 September for declaration under which the black money holders need to pay 45% penalty.

Features of scheme-

  • The scheme had provided a one-time opportunity to black money holders who had not paid full taxes in the past to come clean by declaring their domestic undisclosed income and assets by paying tax plus penalty.
  • The potential beneficiaries were assured by both government and tax department that they would not be persecuted.

It’s result-

  • The amnesty scheme for taxpayers to declare undisclosed past income has yielded surprisingly positive dividend.
  • The four-month window granted for evaders to come clean opened sluggishly, but eventually over 64,200 assessees disclosed undeclared assets worth at least Rs.65,250 crore.
  • Under this scheme government has earned about 30,000 crore in the form of taxes and penalty.
  • The scheme has provided cushion effect for the Centre on the fiscal deficit management front since it hadn’t set any explicit revenue expectations from the scheme.

Suggestions-

  • Though various people came forward to declare their undisclosed past income, but still there is large sections of people are evading their income.
  • The tax department must crack down on such evaders and spruce up its data-mining methods to expand the country’s shallow tax base.

Conclusion-

A huge amount of black money or undisclosed money operates within Indian economy and it is national threat. The government’s initiative to curb the black money was good step and yielded considerably good result. Now government should not stop its war, and all existing black money needs to be effectively unearthed.


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