Modi May Push Drive Against Black Money After Uttar Pradesh Sweep: BofA-ML

With the stunning election victory in Uttar Pradesh indicating validation of the Bharatiya Janata Party (BJP)-led government's demonetisation move, Prime Minister Narendra Modi is expected to intensify the drive to push black money hoarders to declare funds under income disclosure scheme.

According to a Bank of America Merrill Lynch (BofA-ML) report, the Centre will step up the drive against black money "through make-an-example raids and seizures" and the income disclosure scheme II (IDS II) is expected to net Rs 1 lakh crore – almost double of what is budgeted.

The report noted that the Modi-led government "would surely want to build on the perception that the UP victory has validated the government's demonetisation drive".

Accordingly, the union ministry of finance, among other measures, is likely to threaten to investigate black money hoarders' property investments using the Benami Property Act. The government had announced demonetisation of Rs 500 and Rs 1,000 currency notes in November, last year, with an aim to curb the black money menace.

The Centre on December 16, 2016, had announced that the second income disclosure scheme will run till March 31. Under this scheme, black money hoarders would have time until March-end to come clean by paying 50 percent tax on bank deposits of junked currencies post-demonetisation.

For those holding unaccounted cash, it offered a new tax evasion amnesty scheme wherein 50 per cent tax will be charged on declarations and a quarter of the total sum would be parked in a non-interest bearing deposit for four years.

Also Read: Black Money: Chargesheets Filed By Income Tax Department Triple In Current Financial Year