Even as black money stashed in tax havens abroad continued to hog the headlines, trade body Assocham has mooted an amnesty scheme for six months to bring back illegal funds. Such funds may be taxed at a flat 40 per cent with a proviso that these funds be put into infrastructure development.

“A high rate of 40 per cent tax with further investment of ten per cent in infrastructure bonds as compared to present maximum tax rate of 30 per cent will help ensure that there is no misuse of the scheme by unintended persons. The funds collected should be used to develop physical and social infrastructure in the country,” said Dilip Modi, president of Assocham. The body submitted its report to finance minister Pranab Mukherjee.

The survey said offering amnesty to tax evaders may not be best of the solutions but one needs to be practical while dealing with the issue. “Ground realities cannot be ignored. The fact remains that, as on date it may not be possible to get hold of these persons who have stashed money abroad. That is why such scheme could be an invitation for these people to come forward and pay taxes,” said report.

Jayesh Sanghvi, partner, Ernst & Young said, “amnesty should be given as a one time option to tax evader who want to mend their past and regularise their income. However, after this amnesty, government should ensure strict enforcement and send out signals that amnesty will not be a regular feature for tax offenders. If the black money comes into the system it will help our economy a lot.”