Black Money Disclosure Scheme Is Big Hit: Rs 65,000 Cr Black Money Disclosed; Hyderabad Top The Charts

Income Tax Department’s scheme to furnish black money details is a massive hit, as Rs 65,250 crore of black money was declared by 64,275 individuals, thereby making it an average of Rs 1 crore, per individual.

Ministry of Finance informed the nation about its successful campaign to bring out black money from Indians. As per the scheme, those who opted to come out of the closet and reveal their black money, they only need to pay 45% of the tax applied, that too in two installments without any threat of audit or penalty.

As per Finance Minister Arun Jaitley, Income Tax dept. Will get Rs 29,000 crore as tax revenues due to this declaration of Rs 69,250 crore black money; which is 0.2% of India’s GDP.

In 1997, a similar scheme called Voluntary Disclosure of Income Scheme was launched, which yielded only Rs 9760 crore as black money declaration; this can be compared to gauge the success of the declarations.

FM Jaitley said, “The objective was to try and make India a more tax-compliant society. Tax compliance leads to higher revenues and reduction of budget deficits, and the money collected is spent on infrastructure, the social sector and rural areas..”

Hyderabad, Mumbai, Delhi Tops The List in Declaration

Andhra Pradesh, Telangana, Maharashtra and New delhi topped the list of declarations of black money, all over India. City wise, Hyderabad, Mumbai and Delhi were the top destinations from which black money was declared.

Hyderabad was the #1 destination, as Rs 13,000 crore was declared from this single city; and whooping Rs 10,000 crore was declared as black money from a single group of businessmen, who were related with each other. As per unconfirmed reports, these persons can be the frontmen of some industrialists or politicians.

Mumbai and Delhi amounted to Rs 8000 crore each.

State-wise, Andhra Pradesh and Telangana amounted to Rs 19,000 crore, which is the highest in the country for any state.

North East states declared Rs 1000 crore as black money, while Kerala and Odisha saw the least Rs 500 crore declarations.

However, Central Board of Direct Taxes has said in a tweet that no official region-wise list has been made, to protect the identity of black money hoarders. They said, “… no official list of region-wise declarations has been issued. The department is committed to maintain strict confidentiality..:

Publish Images of only ‘Wilful Defaulters’ – RBI

Meanwhile, some banks have gone overboard, and have started publishing images of all defaulters of loans, in newspapers and magazines.

This was done to name and shame the defaulters, and pressurize them to pay-off their loan.

RBI has taken note of this practice, and have issued guidelines to the banks and asked them to publish photographs of only ‘wilful defaulters’ for recovery purpose.

In their notification, RBI said, “A lending institution can consider publication of photographs of only those borrowers who have been declared as wilful defaulters. The lending institutions shall not publish photographs of any other defaulting borrower.”

As per RBI, there is a difference between business failures and intentional defaulters, and banks and lending firms should discriminate between these, and accordingly take public action against them.

In April, ex-RBI Governor Raghuram Rajan had said, “Sometimes you default on your credit card bill, would you like that default to be put up in public.. If every time you defaulted it was put up in public for your neighbours and relatives to see and no reason was given, you might have some concerns.”

RBI in their notification has asked all banks and lending institutions should form a policy, which sets out the criteria based on which photographs of proprietors, partners, directors and guarantors of borrower firms would be published in newspapers and magazines.