What are Elephant Bonds?

  • Blog|
  • 723 Views
  • |
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 29 July, 2021

With an aim to gain access to the global environment and make recommendations for boosting India’s Share and importance in global merchandise, etc., the Government of India constituted a Committee called the High Level Advisory Group (HLAG) in September 2018. This committee has made various recommendations including the ones for bringing back the black money held overseas by tax evaders and contribute to the progress of the nation.

In 2012, CBI estimated that Indians have USD 500 billion of illegal funds in foreign tax havens, more than any other country. As per the report of the Global Financial Integrity, a think tank, USD 213.2 billion was shifted out of the India over 61 years through illegal means.

In order to bring this money back, one of the major recommendations made by the HLAG is issuing of ‘Elephant Bonds’. Basically, the “Elephant Bond” is an amnesty scheme for bringing the unaccounted wealth or black money back to India. The amount disclosed under this scheme will be applied as follows:

 

Example: If Mr. A discloses Rs. 50 crore under this scheme then the said amount shall be applied as follows:

Particulars Percentage Amount (in crore)
Amount payable as tax by Mr. A 15% 7.50
Amount compulsory to be invested in Elephant bonds 40% 20
Amount available with Mr. A 45% 22.50
Total 50

The amount invested in such bonds will be used by the government for the purpose of the Infrastructure development in India. This scheme can be availed by any person having undisclosed income and willing to disclose it. The person disclosing his income under this scheme will get immunity from penalty & prosecutions under various laws including foreign exchange act, black money laws and taxation laws.

These bonds will be issued for long-term and will have maturity period ranging from 20-30 years. Further, Interest on these bonds will be available at the coupon rate of 5% and the same will be chargeable to tax at the rate of 75%.

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Comments are closed.

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied