Income declaration scheme yields $10 billion in hidden wealth

Tens of thousands of suspected tax dodgers have disclosed nearly $10 billion in undeclared income under the Income Declaration Scheme, the government said on Saturday.

About 700,000 notices earlier during 2016 had been sent to suspected evaders to coax them to declare hidden income and assets, known as “black money,” promising they would not be pursued by authorities if they came clean and paid a penalty. Finance Minister, Arun Jaitley said that the four-month scheme that closed on Friday led to 64,275 declarations, resulting in a provisional 652.5 billion rupees ($9.8 billion) in undisclosed wealth. Jaitley added the final figure would likely be higher.

Factoring in taxes owed and penalties of 45 percent, the government could raise more than 293.6 billion rupees ($4.41 billion) from the declared income, according to initial calculations. There was no public target for the initiative, but government officials had an internal goal to raise about $7.5 billion in back taxes.

During the 2014 elections, the Prime Minister had pledged to bring back billions of dollars in “black money” if elected.  In a tweet, the Prime Minister called the outcome of the scheme “successful” and said it was “a great contribution towards transparency and growth of the economy.”

In a total population of 1.3 billion, fewer than 18,000 people declared annual income of Rs one crore or more in 2012-13, as per latest figures. The Income Declaration Scheme was launched on June 1 and ended on the mid-night of September 2016. Reuters