SPECIAL BEARER BONDS (IMMUNITIES AND EXEMPTIONS) ACT, 1981

7 of 1981

27th March, 1981

STATEMENT OF OBJECTS AND REASONS With a view to reducing the liquidity in the economy and controlling prices and canalising for productive purposes black money which has become a serious threat to the nation, the Government decided to issue Special Bearer Bonds. 1991, It was considered necessary to provide for certain immunities and exemptions to render it possible for persons in possession of black money to invest the same in these bonds. An Ordinance called the Special Bearer Bonds (Immunities and Exemptions) Ordinance, 1981 was accordingly promulgated by the President on the 12th January, 1981. 2. The Ordinance provides for certain immunities in favour of persons subscribing to or otherwise acquiring the bonds. It provides that such persons shall not be required to disclose for any purpose whatsoever the nature and source of acquisition of the bonds. It prohibits any inquiry or investigation against any such person under any law on the ground that such person has subscribed to, or has otherwise acquired, the bonds. It makes the fact of subscription to, or acquisition of the bonds inadmissible in evidence in any proceedings relating to any offence or imposition of any penalty under any such law. These immunities have been made subject to an exception in relation to prosecution for certain offences relating to property or prevention of corruption. The ordinance also provides that the acquisition of the bonds shall not be taken into account for the purpose of any proceedings under the Income-tax Act, 1961,the Wealth-tax Act, 1957andthe Gift-tax Act, 1958. The bonds themselves have been exempted from Wealth-tax. The premium payable on the redemption of the bonds has been exempted from income-tax. It has also been provided that transfer of the bonds will not attract any liability to capital gains tax or gift-tax. 3. The Bill seeks to replace the aforesaid Ordinance.-see Gaz. of India. 2-3-1981, Pt. II- S. 2. Ext.,p. 160.

An Act to provide for certain immunities to holders of Special Bearer Bonds, 1991 and for certain exemptions from direct taxes in relation to such bonds and for matters connected therewith. WHEREAS for effective economic and social planning it is necessary to canalise for productive purposes black money which has become a serious threat to the national economy; AND whereas with a view to such canalisation the

Central Government has decided to issue at par certain bearer bonds to be taken as the

Special Bearer Bonds, 1991, of the face value often thousand rupees and redemption value, after ten years, of twelve thousand rupees; AND whereas it is expedient to provide for certain immunities and exemptions to render it possible for persons in possession of black money to invest the same in the said Bonds;

BE it enacted by Parliament in the Thirty-second Year of the Republic of India as follows :-

SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT

(1) This Act may be called The Special Bearer Bonds (Immunities and Exemption) Act, 1981.

(2) It extends to the whole of India.

(3) It shall be deemed to have come into force on the 12th day of January, 1981.

SECTION 02: DEFINITION

In this Act, "Special Bearer Bonds" means the Special Bearer Bonds, 1991, issued by the Central Government.

SECTION 03: IMMUNITIES

(1) Notwithstanding anything contained in any other law for the time being in force,-

(a) no person who has subscribed to or has otherwise acquired Special Bearer Bonds shall be required to disclose, for any purpose whatsoever, the nature and source of acquisition of such Bonds,

(b) no inquiry or investigation shall be commenced against any person under any such law on the ground that such person has subscribed to or has otherwise acquired Special Bearer Bonds; and

(c) the fact that a person has subscribed to or has otherwise acquired Special Bearer Bonds shall not be taken into account and shall be inadmissible as evidence in any proceedings relating to any offence or the imposition of any penalty under any such law.

(2) Nothing in sub-section (1) shall apply in relation to prosecution for any offence punishable under Chapter 9-orChapter 17 of the Indian Penal Code-, the Prevention of Corruption Act,

1947or any offence which is punishable under any other law and which is similar to an offence punishable under either of those Chapters or under that Act or for the purpose of enforcement of any civil liability. Explanation.- For the purposes of this sub-section, "civil liability" does not include liability by way of tax under any law for the time being 'in force.

SECTION 05: AMENDMENT OF ACT 43 OF 1964

[Repealed by Repealing and Amending Act (19 of 1988). section 2, Sch. 1 (31-3-88).]

SECTION 06: AMENDMENT OF ACT 27OF 1957

[Repealed by Repealing and Amending Act (19 of 1988), section 2 Sch. 1 (31-3-1988).]

 SECTION 07: AMENDMENT OF ACT 18 OF 1958

In section 5 of the Gift-tax Act-, in sub-section (1), after clause (iiia), the following clause shall be inserted, namely :- "(iiib) of property in the form of Special Bearer Bonds, 1991;".

SECTION 08: POWER TO REMOVE DIFFICULTIES

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central. Government may, by order, not inconsistent with the provisions of this Act, remove the difficulty.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

 SECTION 09: REPEAL AND SAVING

- [Repealed by Repealing and Amending Act (19 of 1988), section 2, schedule I (31-3-88). ]