Dinesh Kamath's Editorial 'Indian Government versus Tax Evaders' that was published in Newsband

Indian Government versus Tax Evaders

Indian government has made amendments to the Income Tax law. Those with unaccounted money can pay half their cash as tax and deposit a quarter into a new Pradhan Mantri Garib Kalyan Yojana. Those who fail would end up retaining about 15 per cent of the total amount if they cannot establish a legitimate source for the funds.

This is typical Robinhood style. The war on black money is linked to welfare of the poor. Many clever ploys have been attempted to subvert this drive and convert black money into white. The government is trying to close the door on such ingenuity, and the latest tax law changes should be seen in this context.

Government must crack whip on account holder who have done huge deposit which are disproportionate to their declared income as per tax. Government must spend on welfare measure for the masses using the funds mobilized in this manner. Unless and until benami properties held by the individuals and in the name of firms/companies/trusts are not brought to the light, the black money menace will continue to haunt our nation.

Requisite step was taken by Government. It was indeed needed. This arrow falls on two goals: One: cleaning of black money and second is poor people's welfare.

There is no doubt that demonetisation of big currency notes is a good step to take out the black money i.e under the blanket of tax evaders. This will also give stimulus to people who are out of banking system to have bank accounts. It is also a great blow to the finance of naxalites and terrorists, but one thing is must that implementation of various laws to curb the black money in future should be done in a strict manner. It should be of such a kind that it is impossible for anyone to evade the tax. Laws should be examined in a holistic manner in order to plug the loopholes if there is any. After these steps only we can have India of which we are dreaming of.

It is obvious now that Modi and his team have spent a considerable time thinking and devising a very comprehensive and all-encompassing programme to cleanse the system of black money. It started with Jan Dhan accounts, direct debit of subsidies, tough talks with foreign governments thereby getting details of hoarders, avoiding round-tripping of money by exploiting tax treaties with Mauritius, Cyprus & Singapore, foreign assets disclosure scheme (which has not been a big success though), the income disclosure scheme (IDS) and now the sledge-hammer demonetization. More seem to be on the anvil. There is absolutely no other way than taking stringent, even if unpopular, efforts in all directions to rid the country of the black money menace. By making all transactions go through regular banking systems, the next step in the evolutionary process, namely prevention of generation of black money right at the source in the future, would also be achieved. Let's welcome this comprehensive effort.