A scheme introduced in 1991-92 Budget envisaged that the people with unaccounted money, if deposit the same with the National Housing Bank, will be given complete immunity from enquiry and investigation. The government would deduct 40 per cent of such deposits with the rest belonging to the depositors.
Another scheme, the latest one, is like the earlier ones (of 1951, 1965 and 1975) of voluntary disclosure of income introduced in 1997. Such people were to pay the tax and keep the declared income with them. The government realized over Rs. 10,000 crore as taxes.
The second set of measures relates to tax efforts. One bears upon the tax rates. The underlying approach is that, a reduction in tax rates will dampen the urge for concealing income to evade taxes. Second, concerns the efforts at raising tax revenues through administrative measures.
These consist of simplification of tax laws and tax procedures and more importantly the procedure of tax raids. These measures too have yielded some results. The government has also sought to curb growth of black money through measures like making it mandatory for property registrars, banks, RBI, mutual funds, companies issuing shares and debenture to report high-value transactions.
Cash withdrawal tax introduced in 2005-06 is also another measure to curb black money. Integration of state level VAT into a country wide goods and services tax would also facilitate the process of bringing all economic activities within tax information network’s reach.