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NEW DELHI, Feb 28 (Reuters) - India said it plans tougherpunishments including jail terms of up to 10 years for those whohide undeclared cash outside the country and for the banks andadvisers who help them, as it tries to bring back illicitbillions stashed abroad.
In his budget address on Saturday, Finance Minister ArunJaitley said the government would introduce the changes in a newlaw during the current session of parliament, which will alsoallow enforcement agencies to seize assets held abroad.
The hidden cash "eats into the vitals of our economy andsociety," Jaitley said. "The problems of poverty and inequitycannot be eliminated unless generation of black money and itsconcealment is dealt with effectively and forcefully."
Illegal deposits abroad cost India billions of dollars inlost revenue and Prime Minister Narendra Modi's government haspromised to change laws and enact new measures to bring backsuch funds, known in India as 'black money'.
Evading tax on foreign assets will carry a jail sentence ofup to 10 years, under the government's proposed changes, whilefailing to disclose assets adequately will be punishable by upto 7 years.
When assets abroad cannot be forfeited, the new rules couldallow the government to confiscate equivalent assets in India.
India has also struck a deal with Swiss authorities, whichwill provide information for cases being investigated at home.The two sides have begun talks on an automatic exchange ofinformation, Jaitley said.
Earlier this month, Indian tax officials searched the Mumbaiheadquarters of HSBC Holdings as part of a broaderprobe related to allegations the bank's Swiss business helpedclients dodge taxes. India has been the only Asian country toaggressively investigate HSBC over the matter.
The black money changes come in a full-year budget thatseeks to encourage investment in India with lower corporate taxeventually and simpler process, but also to increase fiscalrevenue.
For the full story on India's budget, click on: (Reporting by Clara Ferreira Marques; Editing by RichardBorsuk)
