Industry body Assocham has suggested a multi-pronged strategy, including a six-month amnesty scheme and a 40-per cent tax on the amount repatriated under the amnesty scheme, to bring back an estimated $2 trillion (Rs1,20,00,000 crore) of black money stashed abroad.
Ved Jain, chairperson of Assocham's Direct Taxes Council, suggested that the government come out with a six-month amnesty scheme that will facilitate transfer of such funds back home on voluntary basis with payment of 40 per cent tax. This would make available Rs48,00,000 crore of much-needed funds to the government, according to Jain.
At Rs1,20,00,000 crore, Assocham's estimate of black money generated in the country is more than the country's nominal GDP, which stood at Rs1,14,00,000 crore (or $1.9 trillion) in 2013-14.
Assocham's estimate is higher than various earlier estimates, which have pegged the quantum of black money between $500 billion and $ 1.4 trillion.
So far, there is no official estimate of black money in India.
A study commissioned by the UPA government in March 2011 to estimate the amount of black money stashed in India and abroad is yet to be completed, though it was to have been completed within 18 months.
Besides the 40 per cent tax on all money offered under the amnesty scheme, the chamber suggested an additional 10 per cent levy on the total money brought back, which, it suggested, could then be parked in infrastructure bonds.
''In all, as much as 50 per cent of funds brought back could be taken away by the government. Out of this, 10 per cent can be returned to the declarant at the expiry of the tenure of infrastructure bonds,'' said Jain.
The proposal is in support of the efforts of the new government to find legal ways to bring black money stashed abroad, Jain said.
''As this effort has worked for other countries, it is feasible and will be a pragmatic step for India to launch an amnesty scheme,'' RK Handoo, who heads Assocham's legal affairs committee, said.
He also felt that the assurance given by the government to the Supreme Court in the late '90s that no further amnesty schemes will be launched can always be modified.
''If the new government takes a stand that an amnesty scheme should be offered, it can always go to the Supreme Court and seek its clearance,'' Handoo said.
''The proposal will also be sent to the Special Investigation Team (SIT) formed at the behest of the Supreme Court, which has already begun its deliberations,'' said Assocham senior vice president Sunil Kanoria while releasing the paper along with Ved Jain, RK Handoo, chairman of Assocham's legal affairs council and secretary general DS Rawat.
Assocham has also pitched for uniform stamp duty of 3 per cent on real estate transactions across the country.