THE Indian Government has sent out about 700,000 notices to suspected tax evaders to coax them to declare hidden income and assets, promising they won’t be pursued by the authorities if they pay a penalty now to clear their name.

    But, as the four-month campaign draws to a close this week, there looks to be few takers despite a high profile warning that this is the last chance for tax dodgers to come clean.

    Officials privately acknowledge they are likely to miss their internal goal to raise about 500 billion rupees (US$7.5 billion) by a wide margin, though there is no public target.

    Disclosures up to mid-September would be enough to generate around US$1.5 billion in extra tax, said one senior tax official and an auditor who advises the government on tax policy.

    Many entrepreneurs aren’t so keen on a scheme that offers little relief: they would have to pay 45 percent in back tax and penalties, and even then would not be sure of keeping the taxman off their back.

    One auditor cited the case of a real estate firm in Mumbai that was investigated by the Enforcement Directorate, a financial crime-fighting agency, after disclosing assets under the Income Declaration Scheme that ends Sept. 30.

    “It’s better to take sleeping pills than declare assets,” the auditor said.

    Finance ministry officials said that information received under the scheme was not shared with any other agency.

    The government is playing tough, saying tax evaders who pass up this chance would face harsher penalties — up to 35 percent tax and a 90 percent fine — and up to seven years in prison if they are subsequently found out.

    But distrust between businesses that often operate in the shadows and authorities that practice what even Finance Minister Arun Jaitley has called “tax terrorism” is hampering the drive.

    A businessman in Noida, a booming commercial hub outside Delhi, said that he had wanted to sell a flat to help pay nearly 4.5 million rupees in tax and penalties under this scheme.

    But no buyer was willing to pay the price, which was less than half what the businessman paid two years ago, on fears they too could face scrutiny. His tax adviser told him to hold off.

    “There is nothing to fear,” the adviser recalled telling the businessman. “We will handle this when the tax official comes to your door.” Both requested anonymity, concerned they could draw the attention of the authorities. (SD-Agencies)