The Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act, 2015

The Black Money (Undisclosed Foreign Income and Assets) Imposition of Tax Act of 2015 (Act no. 22 of 2015) was ratified by the Indian parliament on May 13th, 2015. This Act was given nod by the President of India on May 26th, 2015. Thus, the present Act in furtherance with the bill, namely, the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 was enacted to make provisions for dealing with the problem of the Black Money which is undisclosed foreign income and assets. Moreover, this enactment is also offering provisions as to procedure for dealing with such undisclosed income and assets and also providing imposition of the tax thereon. Thus, this law is offering a comprehensive framework for dealing with such income and assets. And in its application, this enactment is applicable to the all persons irrespective of their residential status under the Income Tax Act. Moreover, this law and its contained provisions are to be brought in to operation from First day of April, 2016. As such, this law is dividing its offered provisions in its provided 88 sections and some key aspects relating to this law are discussed herein below.

The present Act is offered to penalize the concealment of the foreign income. Moreover it is also making provisions for providing the criminal liability for attempting to evade tax in relation to the foreign income.

In the key features of this law, the present Act is requiring the payment of the tax on the undisclosed foreign income or assets, and for such income and assets which were undisclosed and of previous assessment year, the rate of 30 per cent of tax would be applicable. Moreover, in connection with such income, there will be no set off, carry forward, deduction or exemption, application, under the provisions of the Income Tax Act. moreover, such undisclosed foreign income and assets of the individual will be including the income from the sources which are located outside the country, and which were remained undisclosed in the tax returns which were filed by such individuals. Moreover, it will also include the income from the sources which are located outside India for which there has been filed no tax return. Also, it will include the value of the assets remained undisclosed and which are located outside India.

Moreover, this Act is also providing the One- time compliance opportunity, where the Individual need to make declaration of his undisclosed foreign assets for all previous assessment years and as he need to submit such declaration to the tax authority, further he would be permitted for filing such declaration and he would also be required to pay penalty at the rate of 100 per cent.

As such, this Act is providing under its chapter III about the tax management, where the tax authorities in connection with the provisions of this Act will be those income- tax authorities, as specified under the provisions of the Income- Tax Act. Moreover, such authorities are provided with the same powers and also some special powers as they will be required for the purposes of this Act.

Also, this Act is also providing several offences and penalties for the wrongdoers. Some of the key offences and penalty including, the penalty for non- disclosure of foreign income or assents, which would be equal 3 times of the amount of the tax, in addition to the payment of 30 per cents of tax. Also failure to furnish the return in relation to the foreign income or assents would also be punishable with the penalty of a fine of Rs 10 lakh. However, this punishment would not be applicable for the asset valued upto 5 lakh rupees or less. Moreover, there are number of such offences and penalties give under this Act. Also, this law is also making provisions for the prosecution of certain offences, in which wilful attempting for evading the tax, for evading tax payment, failure to furnish returns, company’s liability would be seen. As such there are number of specific provisions which are providing for the levy and collection of such tax on the undisclosed foreign income and assents, moreover it is also authorizing the Board, in the ending provisions, to make rules with the approval from the Centre, and such rules should be for carrying out the effect of this law.

Read the Bare Act here