Print
PDF
Undisclosed Foreign Income and Assets
(Imposition of New Tax) Bill, 2015 (The black money bill) was passed by the
Rajya Sabha on Wednesday Dt. 13.05.2015. It is awaiting
Presidents assent.
The Bill provides for separate taxation
of any undisclosed income in relation to foreign income and assets. Such income
will henceforth not be taxed under the Income-tax Act but under the stringent
provisions of the new legislation.
Main features of the Bill :
1. Rigorous imprisonment
Ø Those who conceal income
and assets and indulge in tax evasion in relation to foreign assets can face
rigorous imprisonment up to 10 years.
2. Non compoundable
Ø The offence will be
non-compoundable and the offenders will not be permitted to approach the
Settlement Commission for resolution of disputes.
3. Tax & penalty
Ø Undisclosed foreign income
or assets shall be taxed at the flat rate of 30 per cent. No exemption or
deduction or set off of any carried forward losses which may be admissible
under the existing Income-tax Act, 1961.
Ø Further concealment of
income in relation to a foreign asset will attract penalty equal to three times
the amount of tax (90 per cent of the undisclosed income or the value of the
undisclosed asset).
4. Offence liable to confiscation
Ø The Bill also proposes to make
concealment of income and evasion of tax in relation to a foreign asset a
'predicate offence' under the Prevention of Money Laundering Act, which will
enable the enforcement agencies to attach and confiscate the accounted assets,
held abroad and launch proceedings.
5. Non
filing or inadequate disclosure may lead to imprisonment
Ø Non-filing of income tax
returns or filing of returns with inadequate disclosure of foreign assets
liable for prosecution with punishment of rigorous imprisonment of up to 7
years.
6. Protection for minor
balances
Ø Failure to report bank
accounts with a maximum balance of up to Rs.5 lakh at any time during the year
will not entail penalty or prosecution.
7. Liability to be computed on current price and not cost
Ø The tax liability on an overseas
property would be computed on the basis of its current market price, not the
price at which it was acquired.
8. Short window to come clean
Ø The Income Tax assesses
with overseas assets will get a one-time opportunity for declaring them. The
time-frame of the short window will be notified.
9. Additional penalty for
non declaration after the short window is over
Ø Failure to furnish return in respect of
foreign income or assets shall attract a penalty of Rs.10 lakh. The same amount
of penalty is prescribed where the assesse has filed a return of income, but
has not disclosed the foreign income and asset or has furnished inaccurate
particulars of the same.
