The Black Money Act of India has garnered a lot of attention in India and abroad. It is being projected as a harsh law to tackle the menace of unaccounted wealth accumulated in foreign countries by Indians. This presentation gives some idea about the various provisions of the law.
The document summarizes the key aspects of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. It explains that the Act aims to tax undisclosed foreign income and assets held by resident individuals and companies in India. Some key points covered include:
- Who qualifies as an assessee under the Act based on residency conditions.
- How undisclosed foreign income and assets located outside India are defined and the flat 30% tax rate imposed on them.
- Exclusions from undisclosed foreign income and the computation of total undisclosed foreign income and value of undisclosed foreign assets.
- Key charging provisions and consequences for non-compliance including penalties and prosecutions.
The document summarizes key aspects of the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 in India. It discusses (1) the background and objectives of the bill which are to tax undisclosed foreign income and assets and punish those generating illegitimate money, (2) key features of the bill including penalties for concealment of foreign income/assets and criminal liability for tax evasion, and (3) important definitions related to the bill such as "resident", "undisclosed foreign income and asset", and rules around computing total undisclosed income and disallowing expenses/losses against such income.
The document discusses capital gains tax under section 45(1) of the Income Tax Act. Some key points include:
1) Capital gains arising from the transfer of a capital asset are taxable as capital gains in the year the transfer takes place.
2) Certain assets like personal household items are not considered capital assets, while others like jewelry, paintings, and cars used for business are.
3) Transfer includes sale, exchange, relinquishment of an asset, or conversion to stock-in-trade. It is taxed in the year of transfer, except for compulsory acquisition or insurance claims, which are taxed in the year compensation is received.
4) Capital gains are classified as short
this presentation consists of the information abou TDS ans TCS and their implications under GST. It also includes the differnce between both the terms.
The document provides an overview of the Goods and Services Tax (GST) system in India. Some key points:
- GST is a consumption-based tax levied on the supply of goods and services. It comprises Central GST, State GST, and Integrated GST.
- Many existing taxes at the central and state level will be subsumed under GST including excise duty, VAT, service tax, etc.
- GST will have multiple tax slabs of 0%, 5%, 12%, 18%, 28% and a cess on luxury and 'sin' goods. Composition scheme available for small businesses.
- Input tax credit mechanism allows set-off of taxes paid
This is a presentation made by me to a batch of Indian tax officers at their training academy on 28th May 2012. It is on the head of income called "Income from Other Sources"
- The document discusses the basics of capital gains taxation in India under sections 45-55 of the Income Tax Act.
- Capital gains are the profits arising from the transfer of a capital asset. The key elements are a capital asset, its transfer, and the computation of the capital gain or loss.
- Capital assets are divided into short-term and long-term based on the period of holding, which determines whether the gain is taxed as short-term or long-term capital gain.
The document summarizes the key aspects of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. It explains that the Act aims to tax undisclosed foreign income and assets held by resident individuals and companies in India. Some key points covered include:
- Who qualifies as an assessee under the Act based on residency conditions.
- How undisclosed foreign income and assets located outside India are defined and the flat 30% tax rate imposed on them.
- Exclusions from undisclosed foreign income and the computation of total undisclosed foreign income and value of undisclosed foreign assets.
- Key charging provisions and consequences for non-compliance including penalties and prosecutions.
The document summarizes key aspects of the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 in India. It discusses (1) the background and objectives of the bill which are to tax undisclosed foreign income and assets and punish those generating illegitimate money, (2) key features of the bill including penalties for concealment of foreign income/assets and criminal liability for tax evasion, and (3) important definitions related to the bill such as "resident", "undisclosed foreign income and asset", and rules around computing total undisclosed income and disallowing expenses/losses against such income.
The document discusses capital gains tax under section 45(1) of the Income Tax Act. Some key points include:
1) Capital gains arising from the transfer of a capital asset are taxable as capital gains in the year the transfer takes place.
2) Certain assets like personal household items are not considered capital assets, while others like jewelry, paintings, and cars used for business are.
3) Transfer includes sale, exchange, relinquishment of an asset, or conversion to stock-in-trade. It is taxed in the year of transfer, except for compulsory acquisition or insurance claims, which are taxed in the year compensation is received.
4) Capital gains are classified as short
this presentation consists of the information abou TDS ans TCS and their implications under GST. It also includes the differnce between both the terms.
The document provides an overview of the Goods and Services Tax (GST) system in India. Some key points:
- GST is a consumption-based tax levied on the supply of goods and services. It comprises Central GST, State GST, and Integrated GST.
- Many existing taxes at the central and state level will be subsumed under GST including excise duty, VAT, service tax, etc.
- GST will have multiple tax slabs of 0%, 5%, 12%, 18%, 28% and a cess on luxury and 'sin' goods. Composition scheme available for small businesses.
- Input tax credit mechanism allows set-off of taxes paid
This is a presentation made by me to a batch of Indian tax officers at their training academy on 28th May 2012. It is on the head of income called "Income from Other Sources"
- The document discusses the basics of capital gains taxation in India under sections 45-55 of the Income Tax Act.
- Capital gains are the profits arising from the transfer of a capital asset. The key elements are a capital asset, its transfer, and the computation of the capital gain or loss.
- Capital assets are divided into short-term and long-term based on the period of holding, which determines whether the gain is taxed as short-term or long-term capital gain.
This document discusses various aspects of section 195 of the Indian Income Tax Act, which deals with tax deducted at source (TDS) for payments made to non-residents. Some key points discussed include:
- Section 195 mandates any person making payments such as interest, royalty or fees for technical services to non-residents to deduct TDS at the time of payment.
- The rate of TDS depends on factors such as whether a lower treaty rate can be applied based on a tax residency certificate.
- Non-compliance can attract penalties for the payer such as interest, fines and in some cases prosecution.
- Exceptions apply when a lower or nil withholding certificate is obtained
The document provides an overview of key aspects of the Integrated Goods and Services Tax (IGST) Act in India. It notes that IGST is levied on all inter-state supplies of goods and services at a rate not exceeding 40%. Zero-rated supplies that allow for input tax credit include exports and supplies to special economic zones. Advance rulings under the IGST Act provide binding guidance on issues like classification and taxability. Refund provisions exist for taxes wrongly paid and for goods purchased in India by international tourists.
Black money and imposition of tax act, 2015Mehul Shah
The document summarizes key aspects of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. It outlines a compliance window mechanism that allows declaration of undisclosed foreign assets within 3 months to pay tax at 30% of the value, plus a penalty of 100% of the tax amount. Rules for valuation of various assets like bullion, property, and shares are also described. The overview notes that those with undisclosed foreign bank accounts must now pay tax on deposits in the account since it was opened.
Wealth tax was introduced in India in 1957 and levied on net wealth exceeding 30 lakhs. It was repealed in 2015 as the government aimed to simplify tax compliance. Under wealth tax, assets such as residential homes, vehicles, yachts, jewelry, cash in hand, and urban land were included in calculating net wealth, while exemptions were provided for one self-occupied residence, former rulers' property, and assets of charitable trusts. Wealth tax was charged at 1% of the value of net wealth exceeding 30 lakhs and aimed to tax accumulated assets rather than income flows. It is no longer levied from assessment year 2016-17 onward.
This document summarizes key aspects of registration under the Goods and Services Tax (GST) law in India, including:
1. Registration is required for any supplier whose aggregate turnover exceeds Rs. 20 lakhs or Rs. 10 lakhs in certain states. It authorizes the supplier to collect taxes and claim input tax credits.
2. Suppliers must register in each state where they conduct business operations. The registration process involves filing Form GST REG-01 along with required documents.
3. Other persons required to compulsory register include casual taxable persons, suppliers of online/electronic services, and those liable to pay tax under reverse charge.
Tax is an important source of revenue for governments worldwide. Taxes are collected on income, sales, purchases, and properties to fund government operations. There are two types of taxes: direct taxes which are paid directly by individuals like income tax; and indirect taxes which are passed on through other entities like sales tax. Income tax was first introduced in India in 1860 under British rule to fund expenses from the 1857 rebellion. The current Income Tax Act of 1961 governs income tax in India and has been amended over time. It details the taxation of various types of income for individuals and organizations.
This document provides an overview of Tax Deduction at Source (TDS) in India. TDS refers to tax deducted at the source of income by the payer from amounts paid to the recipient. The key points covered are:
- TDS is an advance tax paid to the government and the tax deducted has to be deposited within a specified time.
- Employers, government bodies, companies, banks, and other specified entities are responsible for deducting TDS based on the type of payment and thresholds.
- Various sections of the Income Tax Act specify the rates of TDS to be applied on different types of income such as salaries, interest, rent, professional fees, lottery winnings
Prohibitions and restriction on import and export of goodsarjunparashar6
This document discusses prohibitions and restrictions on the import and export of goods under Indian law. It defines goods under the Customs Act of 1962 and other acts. It outlines prohibited goods, which cannot be imported or exported without meeting certain conditions. Restricted goods require an import or export license. It lists purposes for prohibiting or restricting trade in goods, such as security, public order, preventing smuggling or shortages. It provides overviews of prohibited goods and restricted goods that require licenses or meet certain conditions for trade. It also includes a case study on related legal notifications.
This document provides an overview of the Goods and Services Tax (GST) system that is being implemented in India. Some key points:
- GST is a comprehensive indirect tax that will combine multiple state and central taxes into one. It is levied at each stage of production and distribution.
- The proposed GST structure has two components - Central GST to be levied by the Centre and State GST to be levied by the states. Standard rates are proposed at 20% for goods and 16% for services.
- GST aims to reduce tax cascading and make India's tax system simpler, more transparent and boost the economy by making exports more competitive.
- There were challenges
The document summarizes the various types of returns required to be filed under the Goods and Services Tax (GST) regime in India. It discusses 18 different return forms including monthly, quarterly, annual returns to be filed by regular taxpayers, compounding taxpayers, Input Service Distributors, e-commerce operators, non-resident taxpayers, and others. The returns require reporting of outward and inward supplies, input tax credit claimed, tax payable, payments made, and other details. The returns are largely auto-populated based on information filed in other returns, and allow for modifications and corrections.
Objectives & Agenda :
To analyse and interpret the provisions of the Income-tax Act relating to computation and chargeability of Capital Gains. In this Webinar, we will discuss the basics of Capital Gains starting from the Charging Provision. We will understand the meaning of capital asset, meaning of transfer, the types of capital gains, how to compute capital gains and how it arises in specified cases. Finally, the Webinar will touch upon relevant Judicial Precedents.
This document provides an overview of a workshop on the Foreign Exchange Management Act (FEMA) regulations and the foreign direct investment policy of India. It discusses the evolution of FEMA from the stringent Foreign Exchange Regulation Act of 1973 to the more liberal FEMA of 2000. It also outlines India's foreign investment policy framework, including the sectors that are restricted, permitted or prohibited for foreign investment. Additionally, it covers key aspects of FEMA such as the regulatory setup, definitions, transactions covered, and penalties for non-compliance.
Double Taxation Avoidance Agreement (DTAA) is a bilateral treaty between two countries to avoid double taxation of income earned by taxpayers of one country from sources in another country. DTAA divides taxing rights between the source and residence country to avoid double taxation. It provides relief to taxpayers through exemption and tax credit methods. India follows the OECD model convention for DTAA and has signed 88 agreements including with major trading partner China. DTAA promotes free flow of trade and investment by providing tax certainty and reducing tax burdens on multinational operations.
This document provides information about income from other sources under the Indian Income Tax Act, including:
- Income from other sources is the residual head of income for any income not covered under other heads.
- Section 56(2) lists specific incomes chargeable under this head, such as dividends, lottery winnings, interest, renting of machinery.
- Other incomes chargeable include various types of interest, director's fees, agricultural income from foreign land, and undisclosed income under sections 68-69C.
The document discusses the Foreign Exchange Management Act (FEMA) and its regulations regarding the remittance of assets. FEMA was introduced in 2000 to consolidate and amend laws relating to foreign exchange. It aims to facilitate external trade and payments. The Foreign Exchange Management (Remittance of Assets) Regulations, 2016 place various prohibitions and permissions regarding the remittance of assets held in India. These include prohibiting remittance without permission, and permitting remittance in cases such as inheritance, winding up of offices, and payment of taxes in accordance with Indian law.
The document provides an overview of refund provisions under GST including situations where refunds may arise, legal provisions, refund procedures and time limits, refund scenarios, and basic features of the refund process. Key points include:
- Refunds can arise from excess payments, exports, deemed exports, provisional assessments, and other situations.
- The CGST and IGST Acts contain provisions regarding refund of tax, interest, and other amounts paid.
- The time limit to claim a refund is 2 years from the relevant date, and refunds must generally be sanctioned within 60 days.
- Various scenarios where refunds may be claimed are described, along with required documents and restrictions.
-
Income tax is a tax paid to the government on income. There are different types of taxes including direct taxes like income tax paid directly by taxpayers. Income tax is assessed based on an individual's gross total income, which is the aggregate income from five heads - salaries, house property, business/profession, capital gains, and other sources. Key concepts include taxable income, tax exemption limits, tax rates, residential status, tax deductions, and different types of income like casual income, capital gains income etc.
The document summarizes India's Black Money (Undisclosed Foreign Income & Assets) & Imposition of Tax Act of 2015. It provides a one-time 90-day window for holders of undeclared foreign assets to declare them and pay a 60% tax and penalty. Failure to do so within this timeline will result in additional penalties of 90% for a total tax liability of 120% of undisclosed black money. The government collected Rs. 4,147 crore from 638 disclosures under this compliance window. Going forward, India is working with other countries to exchange tax and financial information in order to crack down on undisclosed wealth held abroad.
Hitesh D. Gajaria explains Black Money Tax Law - Aug 2015Hitesh Gajaria
India enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 w.e.f 1 July, 2015
Stringent Tax and Penalty aggregating 120% of the Undisclosed Foreign Assets and Income Plus Prosecution with Rigorous Imprisonment 3 months to 7 years Plus Fine
Limited One Time Compliance Window to come Clean with Tax 30% and Penalty 30% available until 30th September 2015 - payment by 31st December 2015
This Presentation gives an Overview of the Act and Rules and is meant to share knowledge and is Not a Substitute for appropriate Professional Advice
This document discusses various aspects of section 195 of the Indian Income Tax Act, which deals with tax deducted at source (TDS) for payments made to non-residents. Some key points discussed include:
- Section 195 mandates any person making payments such as interest, royalty or fees for technical services to non-residents to deduct TDS at the time of payment.
- The rate of TDS depends on factors such as whether a lower treaty rate can be applied based on a tax residency certificate.
- Non-compliance can attract penalties for the payer such as interest, fines and in some cases prosecution.
- Exceptions apply when a lower or nil withholding certificate is obtained
The document provides an overview of key aspects of the Integrated Goods and Services Tax (IGST) Act in India. It notes that IGST is levied on all inter-state supplies of goods and services at a rate not exceeding 40%. Zero-rated supplies that allow for input tax credit include exports and supplies to special economic zones. Advance rulings under the IGST Act provide binding guidance on issues like classification and taxability. Refund provisions exist for taxes wrongly paid and for goods purchased in India by international tourists.
Black money and imposition of tax act, 2015Mehul Shah
The document summarizes key aspects of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. It outlines a compliance window mechanism that allows declaration of undisclosed foreign assets within 3 months to pay tax at 30% of the value, plus a penalty of 100% of the tax amount. Rules for valuation of various assets like bullion, property, and shares are also described. The overview notes that those with undisclosed foreign bank accounts must now pay tax on deposits in the account since it was opened.
Wealth tax was introduced in India in 1957 and levied on net wealth exceeding 30 lakhs. It was repealed in 2015 as the government aimed to simplify tax compliance. Under wealth tax, assets such as residential homes, vehicles, yachts, jewelry, cash in hand, and urban land were included in calculating net wealth, while exemptions were provided for one self-occupied residence, former rulers' property, and assets of charitable trusts. Wealth tax was charged at 1% of the value of net wealth exceeding 30 lakhs and aimed to tax accumulated assets rather than income flows. It is no longer levied from assessment year 2016-17 onward.
This document summarizes key aspects of registration under the Goods and Services Tax (GST) law in India, including:
1. Registration is required for any supplier whose aggregate turnover exceeds Rs. 20 lakhs or Rs. 10 lakhs in certain states. It authorizes the supplier to collect taxes and claim input tax credits.
2. Suppliers must register in each state where they conduct business operations. The registration process involves filing Form GST REG-01 along with required documents.
3. Other persons required to compulsory register include casual taxable persons, suppliers of online/electronic services, and those liable to pay tax under reverse charge.
Tax is an important source of revenue for governments worldwide. Taxes are collected on income, sales, purchases, and properties to fund government operations. There are two types of taxes: direct taxes which are paid directly by individuals like income tax; and indirect taxes which are passed on through other entities like sales tax. Income tax was first introduced in India in 1860 under British rule to fund expenses from the 1857 rebellion. The current Income Tax Act of 1961 governs income tax in India and has been amended over time. It details the taxation of various types of income for individuals and organizations.
This document provides an overview of Tax Deduction at Source (TDS) in India. TDS refers to tax deducted at the source of income by the payer from amounts paid to the recipient. The key points covered are:
- TDS is an advance tax paid to the government and the tax deducted has to be deposited within a specified time.
- Employers, government bodies, companies, banks, and other specified entities are responsible for deducting TDS based on the type of payment and thresholds.
- Various sections of the Income Tax Act specify the rates of TDS to be applied on different types of income such as salaries, interest, rent, professional fees, lottery winnings
Prohibitions and restriction on import and export of goodsarjunparashar6
This document discusses prohibitions and restrictions on the import and export of goods under Indian law. It defines goods under the Customs Act of 1962 and other acts. It outlines prohibited goods, which cannot be imported or exported without meeting certain conditions. Restricted goods require an import or export license. It lists purposes for prohibiting or restricting trade in goods, such as security, public order, preventing smuggling or shortages. It provides overviews of prohibited goods and restricted goods that require licenses or meet certain conditions for trade. It also includes a case study on related legal notifications.
This document provides an overview of the Goods and Services Tax (GST) system that is being implemented in India. Some key points:
- GST is a comprehensive indirect tax that will combine multiple state and central taxes into one. It is levied at each stage of production and distribution.
- The proposed GST structure has two components - Central GST to be levied by the Centre and State GST to be levied by the states. Standard rates are proposed at 20% for goods and 16% for services.
- GST aims to reduce tax cascading and make India's tax system simpler, more transparent and boost the economy by making exports more competitive.
- There were challenges
The document summarizes the various types of returns required to be filed under the Goods and Services Tax (GST) regime in India. It discusses 18 different return forms including monthly, quarterly, annual returns to be filed by regular taxpayers, compounding taxpayers, Input Service Distributors, e-commerce operators, non-resident taxpayers, and others. The returns require reporting of outward and inward supplies, input tax credit claimed, tax payable, payments made, and other details. The returns are largely auto-populated based on information filed in other returns, and allow for modifications and corrections.
Objectives & Agenda :
To analyse and interpret the provisions of the Income-tax Act relating to computation and chargeability of Capital Gains. In this Webinar, we will discuss the basics of Capital Gains starting from the Charging Provision. We will understand the meaning of capital asset, meaning of transfer, the types of capital gains, how to compute capital gains and how it arises in specified cases. Finally, the Webinar will touch upon relevant Judicial Precedents.
This document provides an overview of a workshop on the Foreign Exchange Management Act (FEMA) regulations and the foreign direct investment policy of India. It discusses the evolution of FEMA from the stringent Foreign Exchange Regulation Act of 1973 to the more liberal FEMA of 2000. It also outlines India's foreign investment policy framework, including the sectors that are restricted, permitted or prohibited for foreign investment. Additionally, it covers key aspects of FEMA such as the regulatory setup, definitions, transactions covered, and penalties for non-compliance.
Double Taxation Avoidance Agreement (DTAA) is a bilateral treaty between two countries to avoid double taxation of income earned by taxpayers of one country from sources in another country. DTAA divides taxing rights between the source and residence country to avoid double taxation. It provides relief to taxpayers through exemption and tax credit methods. India follows the OECD model convention for DTAA and has signed 88 agreements including with major trading partner China. DTAA promotes free flow of trade and investment by providing tax certainty and reducing tax burdens on multinational operations.
This document provides information about income from other sources under the Indian Income Tax Act, including:
- Income from other sources is the residual head of income for any income not covered under other heads.
- Section 56(2) lists specific incomes chargeable under this head, such as dividends, lottery winnings, interest, renting of machinery.
- Other incomes chargeable include various types of interest, director's fees, agricultural income from foreign land, and undisclosed income under sections 68-69C.
The document discusses the Foreign Exchange Management Act (FEMA) and its regulations regarding the remittance of assets. FEMA was introduced in 2000 to consolidate and amend laws relating to foreign exchange. It aims to facilitate external trade and payments. The Foreign Exchange Management (Remittance of Assets) Regulations, 2016 place various prohibitions and permissions regarding the remittance of assets held in India. These include prohibiting remittance without permission, and permitting remittance in cases such as inheritance, winding up of offices, and payment of taxes in accordance with Indian law.
The document provides an overview of refund provisions under GST including situations where refunds may arise, legal provisions, refund procedures and time limits, refund scenarios, and basic features of the refund process. Key points include:
- Refunds can arise from excess payments, exports, deemed exports, provisional assessments, and other situations.
- The CGST and IGST Acts contain provisions regarding refund of tax, interest, and other amounts paid.
- The time limit to claim a refund is 2 years from the relevant date, and refunds must generally be sanctioned within 60 days.
- Various scenarios where refunds may be claimed are described, along with required documents and restrictions.
-
Income tax is a tax paid to the government on income. There are different types of taxes including direct taxes like income tax paid directly by taxpayers. Income tax is assessed based on an individual's gross total income, which is the aggregate income from five heads - salaries, house property, business/profession, capital gains, and other sources. Key concepts include taxable income, tax exemption limits, tax rates, residential status, tax deductions, and different types of income like casual income, capital gains income etc.
The document summarizes India's Black Money (Undisclosed Foreign Income & Assets) & Imposition of Tax Act of 2015. It provides a one-time 90-day window for holders of undeclared foreign assets to declare them and pay a 60% tax and penalty. Failure to do so within this timeline will result in additional penalties of 90% for a total tax liability of 120% of undisclosed black money. The government collected Rs. 4,147 crore from 638 disclosures under this compliance window. Going forward, India is working with other countries to exchange tax and financial information in order to crack down on undisclosed wealth held abroad.
Hitesh D. Gajaria explains Black Money Tax Law - Aug 2015Hitesh Gajaria
India enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 w.e.f 1 July, 2015
Stringent Tax and Penalty aggregating 120% of the Undisclosed Foreign Assets and Income Plus Prosecution with Rigorous Imprisonment 3 months to 7 years Plus Fine
Limited One Time Compliance Window to come Clean with Tax 30% and Penalty 30% available until 30th September 2015 - payment by 31st December 2015
This Presentation gives an Overview of the Act and Rules and is meant to share knowledge and is Not a Substitute for appropriate Professional Advice
Hitesh D. Gajaria Black Money Law - 1 Aug 2015Hitesh Gajaria
Black Money (Undisclosed Income and Assets) and Imposition of Tax Act, 2015 is the latest statute effective from 1 July 2015, with a One Time Compliance (OTC) (30 Sept. 2015) and Payment of Tax and Penalty (31 Dec. 2015) Opportunity
This is a very Stringent Act - Outside the OTC Window Tax will be levied @ 120% together with Prosecution - 6 months to 7 Years Rigorous Imprisonment + Fine
Time Is Short for the OTC and unless Extended could lead to difficulty in compliance
Prime Minister Modi announced that Rs. 6,500 crore of undisclosed income had been declared under the Black Money Act as part of a one-time compliance window. This allows those with undisclosed foreign assets to declare them by September 30, 2015 by paying a tax and penalty totaling 60% of the assets' fair market value to receive amnesty. The Act aims to curb black money and targets undisclosed foreign income and assets not previously declared in tax returns, imposing a 30% tax on such amounts. It provides an opportunity for tax evaders to come clean before more stringent provisions take effect.
Black money refers to funds earned through illegal means on which taxes have not been paid. In India, a large amount of black money is estimated to be stashed abroad, with some reports indicating over $500 billion in foreign tax havens. Common methods for generating and hiding black money include under-invoicing exports and over-invoicing imports, undisclosed income from cash businesses, and round-tripping of funds where money is taken out of India illegally and brought back. Recent leaks like the Panama Papers have exposed many Indian individuals and politicians with undisclosed funds abroad. The government has introduced various measures and schemes to curb the generation and hoarding of black money.
Regulation to curb black money and benami transactionJyoti Mishra
The document summarizes regulations to curb black money and benami transactions in India. It defines black money as income on which taxes have not been paid and benami transactions as transactions done without official documentation between two parties in trust. Sources of black money are identified as income from illegal activities and tax evasion on legal income. Regulations discussed include the Black Money Act, FATCA, demonetization, increased reporting requirements, and the Benami Transactions Prohibition Amendment Act, which defines benami transactions and outlines penalties for participation including imprisonment and fines based on the fair market value of properties. The amendment aims to curb black money held overseas and domestically.
The document discusses clarifications provided around India's Black Money Act through a set of Frequently Asked Questions. The Act provides a one-time window for those with undisclosed foreign assets to declare them by paying 60% tax and penalty to avoid prosecution. Only immunity from offenses under Income Tax, Wealth Tax, FEMA, Companies Act, and Customs Act is provided. Declarations do not provide immunity from other Acts like Wildlife Protection Act if the assets were acquired illegally. Immunity is also not provided under the Prevention of Money Laundering Act as that offense requires an underlying scheduled offense to have occurred.
The document discusses clarifications provided around India's Black Money Act through a set of Frequently Asked Questions. The Act provides a one-time window for those with undisclosed foreign assets to declare them by paying 60% tax and penalty to avoid prosecution under the Act. However, immunity only applies to 5 specific Acts and not others. While firms and companies can declare undisclosed foreign assets, immunity from prosecution is only granted to directors for offenses under the 5 Acts.
Professional services a chartered accountant can provide in preventing money ...CA. (Dr.) Rajkumar Adukia
The implementation of PMLA is conferred on several authorities as mentioned such as Director or Additional Director or Joint Director, Deputy Director, Assistant Director, and such additional directors/officers whose appointment may be deemed necessary under the provisions of the PMLA. Professionals like chartered accountants are more conversant with the business environment and hold special expertise in finances that gives them an additional advantage to fit into the role of assisting, serving such authorities.
The BMR View UnFINA & Money Laundering In IndiaAbhishek Bali
While a lot has been said and written about Undisclosed Foreign Income and Assets (Imposition of Tax) Bill (UnFINA) over the last few days, most of this is based on the bill’s sections, directives and penalties, as cleared by the Cabinet. The conversations around UnFINA have been relegated to the number of years of imprisonment, fines and percentage of penalties. In our view this has led to a case of missing the forest for the trees. I look forward to your inputs on the proposed law and its effects on the general politico-economic environment in India
While a lot has been said and written about The Black Money Bill (2015) over the last few months, most of this is based on the bill’s sections, directives and penalties, as cleared by the Cabinet. The conversations around this bill have been relegated to the number of years of imprisonment, fines and percentage of penalties. In our view this has led to a case of missing the forest for the trees.
The initiatives proposed by honourable Finance Minister in his budget speech on February 28, 2016 to effectively deal with the problem of black money, which eats into vitals of our society and economy, are highly commendable. The measures initiated by the government in the last nine months to bring back the black money in Swiss Banks has already brought very fruitful results and the names and the details of possible offenders have already been disclosed to Special Investigation Team set up by honorable Supreme Court.
THE UNDISCLOSED FOREIGN INCOME AND ASSETS (IMPOSITION OF TAX) BILL, 2015Sadanand Patwardhan
The second term 2009-2014 of Congress led UPA government was marked by slew of corruption scandals blowing up in its face. Then the leaks from HSBC and LGT Bank in Liechtenstein came in that Rich Indians had stashed their ill gotten wealth with them, often ably aided by the banks. This confirmed the old belief that Indians have thousands of billions of US$ stashed in Switzerland and other safe heavens abroad safe behind the secrecy of regulatory walls. In the 2014 general elections that BJP led NDA won handsomely under its charismatic leader Narendra Modi tall promises were made that the illegal hoards of money would be brought back for the development of India. In fact, it was boasted that within specific time period of 100 days the task would be accomplished. Supreme Court had ordered the UPA government in its dying months to constitute a Special Investigation Team, SIT, supervised by retired judges that were chosen by it to monitor the black money probe. Modi took credit by constituting SIT within weeks of assuming power, though he was by law required to do so. However, after the initial flush of defeating the corrupt UPA government, even Modi government was seen dragging its feet on the issue by arguing in the court that it couldn't disclose the names of Indians holding Foreign bank accounts already received from HSBC/LGT leaks because of treaties and agreements with foreign governments; the very same plea taken by previous UPA government. In the current 2015 budget session of parliament the finance minister Arun Jaitely introduced a bill through which NDA government seeks to address the charge that it is going soft on the issue of black money.
Demonetization and its effects
Dr. Abdul Azeez N.P.
Assistant Professor of Economics,
Aligarh Muslim University Malappuram Centre abdulazeeznp@gmail.com
What is Cryptocurrency Bill? When will crypto bill come into force? How government will tackle the serious rise of crypto traders? What information is available regarding the Crypto Bill?
The newsletter provides updates on economic, regulatory, and market news. The Lok Sabha passed a bill imposing steep penalties for black money held abroad. The government proposed diluting whistleblower protection laws. SEBI asked listed companies to disclose securities held by insiders and implement codes of conduct to prevent insider trading. IRDAI proposed tighter registration norms for insurance companies requiring details on ownership and approved products. RBI instructed banks to appoint internal ombudsmen to improve customer service. The tax department halted MAT notices to FIIs while examining past cases. Market indices declined with the Sensex down 467 points and Nifty falling 155 points.
The newsletter provides updates on economic, regulatory, and market news. The Lok Sabha passed a bill imposing steep penalties for black money held abroad. The government proposed diluting whistleblower protection laws. SEBI asked listed companies to disclose securities held by insiders and implement codes of conduct to prevent insider trading. IRDAI proposed tighter registration norms for insurance companies requiring details on ownership and approved products. RBI instructed banks to appoint internal ombudsmen to improve customer service. The tax department halted MAT notices to FIIs while examining past cases. Market indices declined with the Sensex down 467 points and Nifty falling 155 points.
Black money refers to wealth that is unreported and untaxed. It has become a major problem in India, estimated to total over 25 lakh crores rupees. High tax rates, complicated tax laws, and corruption have encouraged the growth of black money and a parallel economy. The government has taken steps like voluntary disclosure schemes, demonetization, and bonds to curb black money, but more remains to be done to simplify tax laws and address the underlying causes of its proliferation.
The document summarizes important direct tax proposals in India. Some key points include:
- No changes proposed to individual tax slabs, thresholds, or surcharges but a new 4% health and education cess is introduced.
- Standard deduction of Rs. 40,000 for salaried individuals and increased deductions for senior citizens for health insurance and medical treatments.
- Changes to capital gains tax provisions including the removal of long-term capital gains tax exemption and a new provision to calculate tax on long-term capital gains from listed shares.
- Corporate tax rate reduced to 25% for companies with turnover up to Rs. 250 crores.
The recent move of the Indian government to demonetise the currency notes of Rs. 500 & Rs. 1000 denominations has resulted in a huge furore throughout India. It has thrown up a large number of tax related issues. Some of these are covered in this presentation that was prepared on 20th November.
Unravelling the income tax annual information returnAmeet Patel
The Annual Information Return that the income-tax department of India gets from various agencies contains a treasure trove of information for a tax officer to work upon. All tax payers should be aware of this and also of how the AIR affects their tax assessments. This presentation takes you through the AIR and also the reports of the Central Information Branch (CIB).
I have also dealt with the tax aspects of the recent demonetisation of Rs. 500 & Rs. 1,000 currency notes by the Govt of India.
A simple presentation that explains the complex subject of Capital Gains and its taxation in India. Not meant for tax professionals but only for the common man.
The Central Board of Direct Taxes of India has recently notified the new Income-tax return forms for a few categories of tax payers. This presentation deals with these new ITR forms - ITR-1, ITR-2, ITR-2A and ITR-4S.
Issues in e filing of tax audit reports for ay 2014-15Ameet Patel
The format of the tax audit report that an Indian tax auditor issues has undergone considerable changes in July, 2014. The e-filing of the same also throws up multiple challenges. This presentation deals with some of the important issues that an auditor is likely to face while electronically filing the tax audit report.
Tax Audit - Changes in form 3CD - August 2014Ameet Patel
The Indian tax authorities have amended the tax audit report format recently. The changes are drastic and cast a huge responsibility on the already burdened tax auditors. The changes are discussed in this presentation.
The Revised Guidance Note on Tax Audit issued by ICAI has also been considered while preparing this presentation.
Only the new clauses or the amended clauses have been considered. The clauses that have not undergone any change have not been considered.
Union budget 2014 15 - for the common manAmeet Patel
The Union Budget of India always evokes a great amount of interest. This time, it was even more keenly awaited since it was the 1st Budget of the new Modi government. This presentation contains a few important pointers on how the Budget affects the common man.
Issues on filing of e tds returns and statementsAmeet Patel
Over the past few months, tax deduction at source in India has become a major pain point for most tax deductors. The complexities in the various provisions have given rise to various headaches for the tax deductors. Not only on the issue of which section to apply and what rate to apply, the issue of filing of the quarterly TDS statements has also become a serious problem. There are a number of problems that are encountered while preparing and filing the statements. This presentation highlights some of the important issues on e-filing of TDS statements.
This document discusses various technologies including social media, mobile technology, and cloud computing. It provides details on the growth of social media platforms and how professionals like accountants can benefit from using social media to build relationships, generate leads, and monitor reputation. Mobile technology is evolving rapidly with new devices like bendable phones and wearable technology. The document discusses how mobile phones can help professionals and be used by accountants to improve efficiency. It also covers emerging technologies like contactless payments and issues around customer relationship management, version control, and data security when working with cloud computing. The key message is that technology is changing rapidly and accountants need to adapt and leverage new technologies to remain relevant.
Basics of income tax assessments and appealsAmeet Patel
A brief presentation made be me to an audience consisting of semi qualified accountants giving the basics of Income-tax assessments and appeals in India. The contents may undergo a change from time to time based on amendments to the Indian Income-tax Act, 1961.
Filing tax returns - pitfalls and precautionsAmeet Patel
This document provides information on filing individual income tax returns in India, including:
- When filing a return is mandatory based on income thresholds
- Due dates for filing depending on taxpayer category
- Penalties for late or non-filing
- The filing process and appropriate forms to use
- Key deductions and exemptions to claim correctly
- Obtaining tax credits and ensuring TDS is reflected in Form 26AS
- Precautions like maintaining documents and making payments by cheque
- New requirements introduced in recent income tax return forms
This is a short presentation for beginners wanting to learn a bit about the Indian Income-tax Act. It gives a snapshot of some of the basic terms in the Indian income-tax law. Hard core tax practitioners may kindly stay away! It's only the common man.
Unlike the e-filing utility for tax audit reports, the utility for e-filing of transfer pricing reports does not seem to be posing too many problems to Indian tax advisors. This presentation brings out certain issues that are being faced. Hope viewers find it useful.
E filing of income tax returns & tax audit reports for A.Y. 2013-14Ameet Patel
The Income-tax department of India has made several changes to the e-filing provisions for tax returns. These have added considerable responsibility on tax payers and their Chartered Accountants. The presentation talks about the changes to the e-filing requirements that are effective F.Y. 2012-13 (Assessment Year: 2013-14)
This is a presentation made at the mPower Summit arranged by Infotech & 4i Committee of Bombay Chartered Accountants' Society. It covers issues that would typically be faced by a small sized CA/CA firm when he/she/it merges with another larger firm. It also covers some thoughts on Innovation and the concept of Delivery v/s. Discovery. The Summit was about Mergers, Managing Growth & Mentoring Talent in the context of CA firms.
The document discusses issues faced by taxpayers in processing of income tax returns due to mismatches in TDS details. Some key points:
1. Mismatches occur when TDS details filed by deductors don't match with taxpayer's return, leading to denial of TDS credit. This causes refund delays and demands.
2. Rectification is a lengthy process as taxpayers have to follow up with deductors and AO to correct errors.
3. Incorrect outstanding demands uploaded by AO also cause refund adjustments without following due process.
4. Relief measures have been announced but implementation remains a challenge, keeping taxpayers in hardship. Streamlining of processes is needed to reduce processing errors and expedite issue resolution.
This is a presentation made by me at a National Conference organised by the Southern India Regional Council of the Institute of Chartered Accountants of India in Mangalore in Feb 2013. I have tried to bring out some ways in which Information Technology can/should be harnessed by Chartered Accountants.
Qf Is Tax Related Issues Assocham ConferenceAmeet Patel
This is a brief presentation made by me at the National Conference on QFIs arranged by Assocham at Delhi on 5th July, 2012. It brings out the various tax related issues that a Qualified Foreign Investor is likely to face on the basis of the law as it stands today.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
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OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
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Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
Undisclosed foreign income and assets and imposition of tax act
1. THE BLACK MONEY (UNDISCLOSED FOREIGN INCOME
AND ASSETS) AND IMPOSITION OF TAX ACT, 2015
1st September, 2015
CA. Ameet Patel
2. AGENDA
INTRODUCTION
THE BLACK MONEY SAGA
STRUCTURE OF THE ACT
PRELIMINARY
BASIS OF CHARGE
PENALTIES
OFFENCES & PROSECUTIONS
ONE TIME COMPLIANCE WINDOW
GENERAL PROVISIONS
FAQS
2
3. Introduction
3
India has strongly advocated the fast implementation of the automatic exchange of tax
information globally, within the time-frame agreed by the G20 countries, in the backdrop
of media reporting names of Indian account holders in HSBC bank's Swiss branch.
At the G20 Brisbane summit last November, leaders endorsed a new global
transparency standard by which more than 90 jurisdictions will begin automatic
exchange of tax information, using a common reporting standard by 2017-2018.
"THE WORLD IS NO LONGER WILLING TO TOLERATE TAX HAVENS WHICH
THRIVE IN SECRECY" - ARUN JAITLEY
4. The Black Money Saga
4
Apr’09
BJP releases a booklet “Indian Black Money Abroad in Secret Banks and Tax Havens”, which contained
allegations against Congress president Sonia Gandhi and her late husband Rajiv Gandhi
Sep’09
India-Swiss prepare to renegotiate the DTAA; to seek details about black money stashed in banks there
Jan’11
Then PM Manmohan Singh questions the calculation behind estimated black money stashed by Indians
abroad ($89.16 billion) but said all possible steps were being taken to bring it back
Aug’11
Appointment of a high-level committee headed by M.C. Joshi (then Chairman of Central Board of Direct
Taxes) to study the generation and curbing of black money
5. The Black Money Saga
5
Nov’11
Jan’12
Nov’13
Apr’14
India commits to G20 that it will remain an active member of the global battle against black money
India signs Convention on Mutual Administrative Assistance on Tax Matters against black money
Gujarat Chief Minister and BJP's PM candidate Narendra Modi promises to bring back black money stashed
abroad and calls for a law on the subject.
Government discloses to the Supreme Court the names of 26 people who had accounts in banks in
Liechtenstein, as revealed to India by German authorities.
6. The Black Money Saga
6
May’14
July’14
Oct’14
The Modi government announces the formation of a Special Investigation Team (SIT) on black money,
headed by retired justice M.B. Shah.
Chasing black money, India gets Swiss invite for discussions. Finance Minister Arun Jaitley informs
parliament that there is a positive response to requests made by India to Swiss bank
The Centre discloses that Pradip Burman of Dabur, Rajkot-based bullion trader Pankaj Lodhiya and Goa-based
mining baron Radha Timblo of Timblo Private Ltd. were among those who had stashed black money abroad.
List of around 627 people Indians, holding accounts in foreign banks as revealed by the French government,
submitted to SC
7. The Black Money Saga
7
Dec’14
Black Money Whistleblower Herve Falciani (who famously leaked information related to thousands of illicit
bank account holders at HSBC in Geneva) contacted by India; Indians in HSBC list hold Rs. 4,479 crores; SIT
wants tax evasion made a ‘criminal offence’
Feb’15
Mar’15
• Bilateral ties with Swiss remain "tense" over its refusal to share bank account details on
the basis of stolen data.
• British banking giant HSBC served summons by the Indian tax authorities regarding
alleged irregularities by its Swiss banking unit.
Black Money Bill tabled in Lok Sabha. The Bill while aiming to bring in a comprehensive new law for
specifically dealing with black money stashed abroad, also provides for a separate taxation of such money
8. The Black Money Saga
8
Apr’15
May’15
July’15
Switzerland ups vigil as India and some other nations threaten criminal action over suspected black
money in Swiss banks
Lok Sabha clears Black money Bill. India asks Switzerland for black money information; Switzerland
to make minor changes in its laws.
Names of Yash Birla & four others (son-in-law of late realty baron Ponty Chadha - Gurjit Singh
Kochar, a Delhi-based businesswoman Ritika Sharma, Mumbai-based individuals behind City
Limousines scam - Sayed Mohamed Masood and Chaud Kauser Mohamed Masood) with Swiss
bank a/c disclosed
Government extends deadline for declaring Black Money to 30th September, 2015
9. TOTAL universe of the LAW on Black
Money
The Black Money (Undisclosed Foreign Income and Assets ) and Imposition of Tax
Act, 2015
Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules,
2015 (Notification dated 2/7/2015)
Order dated 1st July, 2015 making the Act effective from 1/7/2015 in place of AY
1/4/2016
Explanatory notes on certain provisions (Circular No. 12 of 2015 dated 2/7/2015)
FAQs by way of clarification on tax compliance for Undisclosed Foreign Income and
Assets (Circular No. 13 of 2015 dated 6/7/2015)
9
10. Black Money Act – Some Basics
Regular
Provisions
Flat tax @ 30%
Interest
Penalty @ 300% of tax
Prosecution / confiscation under PMLA
One Time
Compliance
Scheme
Flat tax @ 30%
No Interest
Penalty @ 100% of tax
No prosecution 10
11. Black Money Act – Some Basics
It is NOT another VDIS or Amnesty Scheme
It is a stringent & harsh law
Intention of the Government is very clear – to unearth black money & punish
offenders
Last chance has been given to black money hoarders to come clean
The international movement for automatic exchange of information will greatly support
the success of the Black Money Act
11
12. 12
7 CHAPTERS
88 SECTIONS
I.
Preliminary
(S. 1 – 2)
II.
Basis of
Charge
(S. 3 – 5 )
III.
Tax
Management
(S. 6 – 40 )
IV.
Penalties
(S. 41 – 47 )
V.
Offences &
Prosecution
(S. 48 – 58 )
VI.
Onetime
disclosure
window
(S. 59– 72 )
VII.
General
Provisions
(S. 73 – 88 )
13. 13
− Extends to the whole of India
− Effective from 1st July, 2015
− Definitions (15 definitions in Section 2)
14. 14
WHO IS COVERED ?
PERSON
• Not defined under the
Act
• Hence definition under
Income Tax Act needs to
be adopted i.e.
• Individual
• HUF
• Company (impact of
POEM)*
• Firm
• AOP/ BOI
• Local Authority
• Artificial Juridical
person
RESIDENT & ORDINARY RESIDENT
• Within the meaning of clause 6
of Section 6 of the Income Tax
Act (ITA)
• AND by whom tax in respect
of undisclosed foreign income
and assets, or any other sum
of money, is payable under this
Act
• Resident but Not Ordinarily
Resident (RNOR) and
Non-Residents not covered
INCLUDES
• every person who is
deemed to be an
assessee in default
under this Act
15. UNDISCLOSED INCOME of an assessee from a source located outside India
UNDISCLOSED ASSET of an assessee located outside India:
An asset (including financial interest in any entity) located outside India, held by
the assessee in his name or in respect of which he is a beneficial owner, and
he/she has no explanation about the source of investment in such asset or the
explanation given by him is in the opinion of the Assessing Officer unsatisfactory.
The term financial interest in any entity has not been defined in Income Tax Act
as well as the Black Money Act. 15
WHAT IS COVERED ?
16. 16
However , we can refer to the Instructions in the form of Return of Income (ITR Forms):
“Financial interest would include, but would not be limited to, any of the following:-
(1) if the resident assessee is the owner of record or holder of legal title of any financial account, irrespective
of whether he is the beneficiary or not.
(2) if the owner of record or holder of title is one of the following:-
(i) an agent, nominee, attorney or a person acting in some other capacity on behalf of the resident
assessee with respect to the entity.
(ii) a corporation in which the resident owns, directly or indirectly, any share or voting power.
(iii) a partnership in which the resident assessee owns, directly or indirectly, an interest in partnership
profits or an interest in partnership capital.
(iv) a trust of which the resident has beneficial or ownership interest.
(v) any other entity in which the resident owns, directly or indirectly, any voting power or equity interest
or assets or interest in profits.”
17. 17
DEFINITIONS
The following terms have been defined in the same manner under the Black Money
Act as the Income Tax Act:
Black Money Act Income Tax Act
2(1) Appellate Tribunal 2(4)
2(3) Assessment 2(8)
2(4) Assessment Year 2(9)
2(5) Board 2(12)
2(10) Resident 2(42)
S. 2 (15) All other words and expressions used herein but not defined and defined in the
Income-tax Act shall have the meanings respectively assigned to them in that Act.
18. 18
- Charge of Tax
- Scope of Total Undisclosed Foreign Income and Assets
- Computation Mechanism
- Gross Basis
- Pro-rata for partly disclosed income
19. 19
TAX
30% TAX levied in respect of the total undisclosed foreign income and
asset of an assessee for a previous year. An undisclosed asset located
outside India shall be charged to tax on its value in the previous year in
which such asset comes to the notice of the Assessing Officer
The charge is in respect of EVERY ASSESSEE and for EVERY
ASSESSMENT YEAR commencing on or after the 1st day of April, 2016
20. 20
UNDISCLOSED ASSET
“VALUE OF AN UNDISCLOSED ASSET” means the fair market value of an asset (including financial interest in any entity)
determined as per Rule 3 as follows:
1. Bullion, jewellery or precious stone
Higher of:
cost of acquisition
price that the bullion, jewellery or precious stone shall
ordinarily fetch if sold in the open market on the valuation
date (i.e. 1-7-2015)
2. Archaeological collections, drawings,
paintings, sculptures or any work of art
(hereinafter referred to as artistic work)
Higher of:
cost of acquisition
price that the artistic work shall ordinarily fetch if sold in
the open market on the valuation date (i.e. 1-7-2015)
21. 21
UNDISCLOSED ASSET
3. Shares and Securities
I. Quoted share and securities Higher of:
cost of acquisition
the price as determined in the following manner :
A. the average of the lowest and highest price of such shares and
securities quoted on any established securities market on the
valuation date (i.e. 1-7-2015) OR
B. where on the valuation date there is no trading in such shares and
securities on any established securities market, average of the
lowest and highest price of such shares and securities on any
established securities market on a date immediately preceding the
valuation date when such shares and securities were traded on such
securities market
22. 22
UNDISCLOSED ASSET
II. Unquoted equity shares Higher of:
cost of acquisition
value, on the valuation date, of such equity shares as determined in the following
manner, namely:
FAIR MARKET VALUE OF UNQUOTED EQUITY SHARES = (A+B–L) X (PV)
PE
A = Book value of all the assets (other than bullion, jewellery, precious stone, artistic
work, shares, securities and immovable property)
(-) any amount of income-tax paid, if any, less the amount of income-tax refund
claimed, if any
(-) any amount shown as asset including the unamortized amount of deferred
expenditure which does not represent the value of any asset;
23. 23
B = Fair market value of bullion, jewellery, precious stone, artistic work, shares, securities
and immovable property as determined in the manner provided in this rule;
L = Book value of liabilities, but excluding the following amounts, namely:-
(i) the paid-up capital in respect of equity shares;
(ii) the amount set apart for payment of dividends on preference & equity shares;
(iii) Any reserves and surplus, by whatever name called, even if the resulting figure is
negative, other than those set apart towards depreciation;
(iv) any amount representing provision for taxation, other than amount of income-tax paid, if
any, less the amount of income-tax claimed as refund, if any, to the extent of the excess over
the tax payable with reference to the book profits in accordance with the law applicable
thereto;
UNDISCLOSED ASSET
24. 24
UNDISCLOSED ASSET
v) any amount representing provisions made for meeting liabilities, other
than ascertained liabilities;
(vi) any amount representing contingent liabilities other than arrears of
dividends payable in respect of cumulative preference shares;
PE = total amount of paid up equity share capital as shown in the balance-
sheet;
PV = the paid up value of such equity shares;
III. Unquoted share and
security other than equity
share in a company
Higher of:
Cost of acquisition
Price that the share or security shall ordinarily fetch if sold in the open
market on the valuation date (i.e. 1-7-2015)
25. 25
4. Immovable property Higher of:
Cost of acquisition
Price that the property shall ordinarily fetch if sold in the open market on the
valuation date (i.e. 1-7-2015)
5. Account with a bank I. the sum of all the deposits made in the account with the bank since the date
of opening of the account OR
II. where a declaration of such account has been made under Chapter VI and
the value of the account as computed under sub-clause (I) has been charged
to tax and penalty levied under that Chapter, the sum of all the deposits made
in the account with the bank since the date of such declaration.
However, where any deposit is made from the proceeds of any withdrawal
from the account, such deposit shall not be taken into consideration while
computing the value of the account.
UNDISCLOSED ASSET
26. 6. Value of an interest of a person in a partnership
firm or in an association of persons or a limited
liability partnership of which he is a member
the net asset of the firm, association of persons or limited
liability partnership on the valuation date shall first be
determined
ALLOCATION OF NET ASSETS IN FOLLOWING ORDER:
Illustration:
(Situation – 1 – Where dissolution ratio available)
Mr. A (say) Mr. B (say)
NAV – 150; Capital Contribution: A – 25, B – 25;
Dissolution Ratio – 2:1;
Profit Sharing Ratio – 1:1;
25 25(a) Capital Contribution of each partner/
member/person
(b) Dissolution Ratio [Net Assets – Capital of the
Firm (a) ]
67 33
(c) Profit Sharing Ratio [Net Assets – Capital of the
Firm] (Only if in case (b) is not applicable )
- -
Value of interest of that partner or member in the
partnership or association
92 58
UNDISCLOSED ASSET
27. UNDISCLOSED ASSET
Illustration:
(Situation – 2 – Where dissolution ratio not
available)
Mr. A (say) Mr. B (say)
NAV – 150; Capital Contribution: A – 25, B – 25;
Profit Sharing Ratio – 1:1;
25 25
(a) Capital Contribution of each partner/
member/person
(b) Dissolution Ratio [Net Assets (Less) Capital of
the Firm (a) ]
- -
(c) Profit Sharing Ratio [Net Assets (Less) Capital
of the Firm] (Only if in case (b) is not applicable )
50 50
Value of interest of that partner or member in the
partnership or association
75 75
28. UNDISCLOSED ASSET
7. Any Other Asset
Higher of:
cost of acquisition
price that the asset shall ordinarily fetch if sold in the open
market on the valuation date in an arm’s length transaction
29. 29
UNDISCLOSED ASSET
Where an asset (other than a bank account) was transferred before the valuation date, FMV of
such asset shall be higher of:
1. Cost of acquisition
2. Sale price (or FMV on date of transfer if transferred without consideration/ inadequate
consideration )
Where a new asset has been acquired or made out of consideration received on account of
transfer of an old asset or withdrawal from a bank account, then the fair market value of the
old asset or the bank account as the case may be, shall be reduced by the amount of the
consideration invested in the new asset.
Let us understand this with the help of an illustration
30. 30
Illustration
A house property (H1) located outside India was bought in 1997 for 20 lakh rupees. It was sold in
2001 for 25 lakh rupees which were deposited in a foreign bank account (BA). In 2002 another
house property (H2) was bought for 30 lakh rupees. The investment in H2 was made through
withdrawal from BA. H2 has not been transferred before the valuation date and its value on the
valuation date is 50 lakh rupees. Assuming that the value of BA as computed under Rule 3(1)(e) is
70 lakh rupees, the fair market value (FMV) of the assets shall be as below:
FMV of H1: (Higher of Rs. 20 lakh and 25 lakh) – Rs. 25 lakh (invested in BA) = Nil
FMV of BA: Rs. 70 lakh – Rs. 30 lakh (invested in H2) = Rs. 40 lakh
FMV of H2: (Higher of Rs. 30 lakh and 50 lakh) = Rs. 50 lakh
UNDISCLOSED ASSET
31. 31
FMV of an asset is
determined in a currency
which is one of the
permitted currencies
designated by the
Reserve Bank of India
under the Foreign
Exchange Management
Regulations
Then convert into Indian currency as per the
reference rate of the Reserve Bank of India on the
date of valuation.
UNDISCLOSED ASSET
32. 32
FMV of an asset is determined in a
currency other than one of the
permitted currencies designated
by the Reserve Bank of India
Shall be converted into United States Dollar on the date of
valuation as per the rate specified by the Central Bank of the
country or jurisdiction in which the asset is located and such value
in United States Dollar shall be converted into Indian currency as
per RBI reference rate on the date of valuation
where the Central Bank of the country or jurisdiction in which the
asset is located does not specify the rate of conversion from its
local currency to United States Dollar then such rate shall be the
one as specified by any other bank regulated under the laws of
that country or jurisdiction.
UNDISCLOSED ASSET
33. 33
UNDISCLOSED FOREIGN INCOME AND ASSET
Income from a source located outside India, which has not been disclosed
in the return of income furnished within time allowed u/s 139(1), 139(4) & 139(5)
of the ITA.
Income, from a source located outside India, in respect of which a return
is required to be furnished under section 139 of the ITA but no return of
income has been furnished within time allowed u/s 139(1), 139(4) & 139(5) of
the ITA.
Value of an undisclosed asset located outside India.
34. 34
UNDISCLOSED FOREIGN INCOME AND
ASSET
Any adjustments/variations made in income from a source outside India which is being assessed
or reassessed under the various charging provisions of the Income Tax Act shall not be included
in the total undisclosed foreign income i.e.
Sections 29 to Sections 43C – Assessment of Business Profits,
Sections 57 to Sections 59 – Assessment of Income from other sources,
Section 92 C - Transfer Pricing Provisions
Income from House Property and Capital Gains is not included in the above exclusions
No clarification for adjustment made u/s 93 or 94A or Exchange Rate Differences
35. 35
UNDISCLOSED FOREIGN INCOME AND
ASSET
No deduction allowed in
respect of any expenditure or
allowance
No set off of any loss allowed
If assessee utilises an income to acquire an
undisclosed asset located outside India &
furnishes evidence w.r.t such income that it is
assessable or is assessed to tax in any previous
year prior to 01.04.2015, it shall be reduced
from the value of the asset
“G R O S S B A S I S ”
C O M P U TAT I O N
M E C H A N I S M
36. 36
IMMOVABLE PROPERTY
If an immovable property is being acquired by an assessee partly from assessed income and
undisclosed income then a proportionate deduction to the value of such asset would be allowed by
the Assessing officer i.e.
DEDUCTION = Assessable/ assessed Foreign Income X Value of the asset as on the 1st day
Total Cost of the Asset of the FY in which it comes to
the notice of the AO
Illustration:
A house property located outside India was acquired by an assessee in the previous year 2009-10
for Rs 50 L Out of the investment of Rs. 50 L, Rs. 20 L was assessed to tax in the total income of
the previous year 2009-10 and earlier years. Such undisclosed asset comes to the notice of the
Assessing Officer in the year 2017-18. If the value of the asset in the year 2017-18 is Rs. 1 Cr., the
amount chargeable to tax shall be A-B=C
where, A=Rs.1 crore, B=Rs. (100 x 20/50) lakh= Rs.40 lakh, C=Rs. (100-40) lakh=Rs.60 lakh.
37. 37
− Administrative Machinery
− All powers are on the same lines as under the IT Act for
Assessment & Reassessment, Rectification, Appeals,
Revision of Orders, Recovery, Interest
38. The same List of Income Tax Authorities as mentioned under Section 116 of the
Income Tax Act, 1961 would be managing assessments under the proposed Act -
No requirement to file a separate return under Black Money Act.
The AO may, on receipt of an information from an Income-Tax Authority under the
Income-tax Act or any other authority under any law for the time being in
force or on coming of any information to his notice, serve on any person, a
notice requiring him on a date to be specified to produce or cause to be produced
such accounts or documents or evidence as he may require.
38
PROCEDURES
39. No Time Limit for issuing notices for assessment / reassessment unlike
under the ITA. As soon as AO receives information, a notice can be issued.
Time Limit of completion of assessment or reassessment under the Act is set
as two years from the end of the financial year in which notice is served.
2 Assessment Orders expected to be passed under section 143(3) of ITA and
10(3) of Black Money Act
Any sum payable in consequence of any order made under this Act shall be
demanded by a tax authority by serving upon the assessee a notice of demand
in FORM 1 39
PROCEDURES
40. 40
TAX AREARS
In order to recover the tax due from an assessee, the Assessing Officer or the Tax
Recovery Officer, may by a notice in writing require:
• The employer of the assessee to deduct from any payment to the assessee such amount as is
sufficient to meet the tax arrear from the assessee
Employer
• Any debtor of the assessee to pay such amount, not exceeding the amount of debt, as is
sufficient to meet the tax arrear of the assessee.
• If debtor fails to make payment, he shall be deemed to be assessee in default and
proceedings may be initiated against him for realization of amount.
• If the debtor discharges any liability to the assessee after receipt of a notice, he shall be
personally liable to the AO or TRO to the extent of his own liability to the assessee so
discharged or to the extent of the liability of the assessee for any sum due under this Act,
whichever is less.
Debtor
41. 41
PERSONS OTHER THAN ASSESSEE
ASSESSEE
PERSONS JOINTLY & SEVERALLY LIABLE
(where amount is not recoverable from the assessee)
Company Manager (including a managing director) of a company
Firm / LLP
Partners of the firm / representative assessee of the
deceased partners
AOP / BOI
Member of AOP/ BOI /representative assessee of the
deceased members
HOWEVER, A PARTNER OF AN LLP AND MANAGER OF A COMPANY SHALL NOT BE
LIABLE if the manager/partner prove that non-recovery cannot be attributed to any neglect,
misfeasance or breach of duty on his part in relation to the affairs of the company./partnership
The Act is silent on the liability of partners of the firm other than LLP and members of AOP and
BOI.
42. 42
− Undisclosed Foreign Income & assets
− Failure to furnish return in relation to foreign income and asset
− Default in payment of Tax Arrears
− Failure to furnish an information or furnish inaccurate particulars about
an asset (including financial interest in any entity) located outside India
− Other defaults
43. 43
PARTICULARS FIXED PENALTY
Failure to disclose foreign Income / Asset (S.41) 300% of the Tax
Payable
Failure to furnish return of income w.r.t. foreign asset or
income (S.42) * Rs. 10 Lakh
Failure to furnish information/ inaccurate particulars about an
asset (including financial interest in any entity) located outside
India in ROI (S. 43)*
Rs. 10 Lakh
PENALTIES
* Such penalty shall be levied whether the asset is held by him as a beneficial owner or
otherwise, or in respect of which he was a beneficiary, or relating to any income from a source
located outside India, at any time during such previous year. However, failure to disclose one or
more foreign bank accounts having an aggregate balance not exceeding Rs 500,000/- at
any time during the previous year shall not attract any penalty even if not reported.
44. 44
PARTICULARS PENALTY
Failure to pay Tax in Arrears (S. 44) Amount of
Tax arrear
If assessee fails to:
(1) answer any question or
(2) sign a statement he is legally bound to or
(3) produce books and supporting evidences (S. 45)
Min. Rs.
50,000 to
Max. Rs.
2,00,000
PENALTIES
45. 45
− Willful attempt to evade tax, penalty or interest
− Failure to furnish return in relation to foreign income and asset
− Failure to furnish an information or furnish inaccurate particulars
about an asset (including financial interest in any entity) located
outside India
− Other punishments
46. 46
OFFENCE
PROSECUTION
Rigorous
Imprisonment
Failure to furnish return of income w.r.t foreign asset or
income (S. 49) *
Min. 6 months to 7
years plus Fine
Failure to furnish information/ inaccurate particulars
about an asset (including financial interest in any entity)
located outside India in ROI (S . 50) *
Min. 6 months to 7
years plus Fine
PROSECUTIONS
* Such rigorous imprisonment shall apply whether the asset is held by him as a
beneficial owner or otherwise, or in respect of which he was a beneficiary, or
relating to any income from a source located outside India, at any time during such
previous year
47. 47
OFFENCE
PROSECUTION
Rigorous Imprisonment
Wilful Attempt to evade tax (S.51)
1. Resident and Ordinarily Resident
2. Others
Min 3 years to Max 10
years and Fine
Min 3 months to Max 3
years and Fine
Subsequent offences under this Act- where a person
commits the second (or subsequent) offence
Min 3 years to Max 10
years And Fine Rs.5 lac to
Rs.1 cr
Person makes false statement or delivers false
evidences (S.52)
Min 6 months to Max 7
years
Abetment to make and deliver false return, account,
statement or declaration relating to tax payable (S. 53)
Min 6 months to Max 7
years
PROSECUTIONS
48. 48
PROSECUTIONS
In any prosecution for any offence under this Act which requires a culpable mental state,
on the part of the accused, the court shall presume the existence of such mental state
but it shall be a defense for the accused to prove the fact that he had no such mental
state with respect to the act charged as an offence in that prosecution (ONUS TO
PROVE NON EXISTENCE OF CULPABLE MENTAL STATE SHIFTED TO ACCUSED)
Explanation.—“culpable mental state” includes intention, motive or knowledge of a
fact or belief in, or reason to believe, a fact.
A fact is said to be proved only when the court believes it to exist beyond reasonable
doubt and not merely when its existence is established by a preponderance of
probability.
49. 49
BODY CORPORATE/ AOP/ BOI/FIRM/ HUF
Where an offence under this Act has been committed by a Body corporate/ Firm/ LLP/ AOP/ BOI/HUF,
(herein referred as “Company”) the following persons shall be prosecuted:
1. person in charge of and responsible to the company for the conduct of the business at the time the
offence was committed unless he proves that the offence was committed without his knowledge or
that he had exercised all due diligence to prevent the commission of such offence
2. director, manager, secretary or other officer of the company if it is proved that the offence has been
committed with the consent or connivance of, or is attributable to any neglect on the part of them.
50. 50
− Charge of Tax & penalty, Time limit for Declaration & Payment
− Persons not eligible for declaration
− Declaration not eligible in certain cases
− Declaration invalid in certain cases
− Effects of a Valid Declaration
51. 51
One Time Compliance Opportunity by the Act not to be equated with VDIS of 1997
Declaration to be made in respect of any undisclosed asset located outside India and acquired from
income chargeable to tax under the Income-tax Act for any assessment year prior to the
assessment year beginning on 1st day of April, 2016. HENCE THE DECLARATION WINDOW IS
ONLY IN RESPECT OF UNDISCLOSED ASSETS AND NOT UNDISCLOSED INCOME.
Declaration has to be made along with payment of 30% tax on value of such undisclosed asset and
another 30% as penalty. Therefore, the declarant would be liable to pay a total of 60 percent of the
value of the undisclosed asset declared by him
This special rate of tax and penalty specified in the compliance provisions will override any rate
or rates specified under the provisions of the Income-tax Act or the annual Finance Acts.
52. 52
Such Declaration would not be included in any Income Tax Assessment and would also not affect any
previous completed assessments
Assets declared would be exempted from Wealth Tax
Declaration will not be used for imposing penalty or prosecution under Income-tax Act 1961, Wealth Tax Act
1957, Foreign Exchange Management Act 1999, Companies Act, 2013 or Customs Act, 1962
Tax and Penalty so paid shall not be refundable
Any Declaration made by misrepresentation or suppression of fact shall be deemed as void.
Statement of Objects and Reason to the Act clarified that only till the time Chapter VI - One
Time Compliance Window is in existence, no evidence against the declarant shall be used for
initiating penalty or prosecution under ITA, Wealth Tax Act, FEMA, Companies Act or Customs
Act.
“It is merely an opportunity for persons to become tax compliant before the stringent
provisions of the new legislation come into force” - (Statement of Objects and Reasons)
53. 53
Such declaration shall be made in FORM 6
Sl. Declarant Declaration to be signed by
1 Individual
Individual; where individual is absent from India, person authorized by him; where the
individual is mentally incapacitated, his guardian or other person competent to act on his
behalf.
2 HUF
Karta; where the Karta is absent from India or is mentally incapacitated from attending to his
affairs, by any other adult member of the HUF
3 Company
Managing Director; where for any unavoidable reason the managing director is not able to
sign or there is no managing director, by any director.
4 Firm
Managing partner; where for any unavoidable reason the managing partner is not able to sign
the declaration, or where there is no managing partner, by any partner, not being a minor.
5
Any Other
Association
Any member of the association or the principal officer.
6 Any Other Person That person or by some other person competent to act on his behalf.
54. Undisclosed foreign income (what is covered is only undisclosed foreign asset)
Assets acquired from any foreign source income which is not disclosed but not taxable in India.
Eg. Assets acquired by a person while he was a Non resident and now he has become Resident and
Ordinarily Resident.
Any adjustments/variations made in income from a source outside India which is being assessed or
reassessed under the various charging provisions of the Income Tax Act shall not be included in the total
undisclosed foreign income i.e.
Sections 29 to Sections 43C – Assessment of Business Profits,
Sections 57 to Sections 59 – Assessment of Income from other sources,
Section 92 C - Transfer Pricing Provisions
54
EXCLUSIONS FROM
DECLARATION UNDER CHAPTER VI
55. 55
TIME LIMIT
The Central Government by an order has clarified that the Act shall come in to force
on 1st July, 2015. Accordingly, the compliance provisions under Chapter VI shall also
come into force with effect from the date of commencement of the Act i.e. 1st of July,
2015.
The Central Government has further notified 30th September, 2015 as the last date for
making the declaration before the designated Principal Commissioner or Commissioner
of Income Tax (PCIT/CIT) and 31st December, 2015 as the last date by which the tax
and penalty mentioned in para 5 above shall be paid
56. After such declaration has been furnished, the designated Principal CIT/ CIT will issue an
intimation in the proforma annexed to the Circular to the declarant by 31.10.15 whether any
information in respect of the declared asset had been received by the Competent Authority on or
before 30th June 2015, under an agreement entered into by the Central Government under
section 90 or 90A of the Income-tax Act. Where any such information had been received, the
declarant shall file a revised declaration in Form 6 excluding such asset
The declarant shall not be liable for any consequences under the Act in respect of, any asset
which has been duly declared but has been found ineligible for declaration as the Central
Government had prior information on such asset. However, such information may be used
under the provisions of the Income-tax Act
56
57. 57
DECLARATION PROCEDURE
SUMMARY
Declaration filed by the
Assessee up to 30.09.2015
Check whether
Information already with
Central Government (CG)?
Principal CIT/ CIT will
intimate Assessee within
15 days to change the
declaration
Revised Declaration filed
by assessee ?
Time Given upto
31.12.2015 to pay Taxes
and Penalty
Information may
be used under
Income Tax Act
YES
NO
NO
Part Information
already with CG
YES
58. Any person in respect of whom an order of detention has been made under the Conservation
of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (subject to certain
conditions)
Any person who is subjected to prosecution for any offence punishable under Chapter IX or
Chapter XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act,
1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988
Any person notified under section 3 of the Special Court (Trial of Offences Relating to
Transactions in Securities) Act, 1992
Any person against whom notice of assessment has been issued under Income Tax Act 1961
Any person against whom time limit for furnishing of notice of assessment has not expired due to
search, survey under the Income Tax Act 1961
‘Any information’ received by Competent Authority under DTAA or TIEA in respect of the
undisclosed asset, etc. 58
INELIGIBILITY
59. where a notice under section 142 or section 143(2) or section 148 or section 153A or section
153C of the Income-tax Act has been issued in respect of such assessment year and the
proceeding is pending before the Assessing Officer. For the purposes of declaration under section
59 it is clarified that the person will not be eligible under the compliance window if any notice
referred above has been served upon the person on or before 30th June 2015 i.e. before the date
of commencement of this Act. In the form of declaration (Form 6) the declarant will verify that no
such notice has been received by him on or before 30th June 2015.
where a search has been conducted under section 132 or requisition has been made under
section 132A or a survey has been carried out under section 133A of the Income-tax Act in a
previous year and the time for issuance of a notice under section 143 (2) or section 153A or section
153C for the relevant assessment year has not expired. In the form of declaration (Form 6) the
declarant will also verify that these facts do not prevail in his case.
59
INELIGIBILITY
60. 60
where any information has been received by the competent authority under an
agreement entered into by the Central Government under section 90 or section
90A of the Income-tax Act in respect of such undisclosed asset. For the purposes
of declaration under section 59 it is clarified that the person will not be eligible under
the compliance window if any information referred above has been received by the
competent authority on or before 30th June 2015 i.e. before the date of
commencement of this Act.
INELIGIBILITY
61. 61
DECLARATION
INVALID
In the following situations, a declaration shall be void and shall be deemed never to have
been made:-
A. If the declarant fails to pay the entire amount of tax and penalty within the specified date, i.e.,
31.12.2015;
B. Where the declaration has been made by misrepresentation or suppression of facts or
information.
Where the declaration is held to be void for any of the above reasons, it shall be deemed never
to have been made and all the provisions of the Act, including penalties and prosecutions, shall
apply accordingly.
Any tax or penalty paid in pursuance of the declaration shall, however, not be refundable under
any circumstances.
62. 62
VALID
DECLARATION
Where a valid declaration as detailed above has been made, the following
consequences will follow:
A. The amount of undisclosed investment in the asset declared shall not be included in
the total income of the declarant under the Income-tax Act for any assessment year;
B. The contents of the declaration shall not be admissible in evidence against the
declarant in any penalty or prosecution proceedings under the Income-tax Act, the
Wealth Tax Act, the Foreign Exchange Management Act, the Companies Act or the
Customs Act;
63. 63
C.The value of asset declared in the declaration shall not be chargeable to
Wealth Tax for any assessment year or years.
D.Declaration of undisclosed foreign asset will not affect the finality of
completed assessments. The declarant will not be entitled to claim re-
assessment of any earlier year or revision of any order or any benefit or set off
or relief in any appeal or proceedings under the Act or under Income-tax Act in
respect of declared undisclosed asset located outside India or any tax paid
thereon
VALID DECLARATION
65. 65
Section 73 of the Act states that the Central Government may enter into an agreement
with the Government of any other country or specified territory:
to avoid double taxation;
for exchange of information for prevention of evasion or avoidance of tax on
undisclosed foreign income for investigation of cases of evasion or avoidance of tax
on undisclosed foreign income;
for recovery of tax; or
for carrying out any other purpose of the proposed legislation.
AGREEMENT WITH FOREIGN COUNTRIES
66. Therefore, possibly in future we will see such new agreements which will be entered
into by the Central Government under this Act for granting of relief of tax paid under
this Act or taxes paid abroad.
Hence, relief under the existing DTAA can not be claimed and till such time as
agreements under section 73 are not entered into, credit for taxes paid abroad will
not be available under this Act and vice versa.
However, section 84 of the Act provides that provisions of clause (c) and (d) section
90(1) and 90A(1) of the ITA with respect to exchange of information for evasion or
avoidance of Tax and recovery of tax shall be applicable to this Act.
66
AGREEMENT WITH FOREIGN COUNTRIES
67. Notice, summons, requisition, order or any other communication under this Act may be made by delivering
or transmitting a copy thereof, to the person named therein:-
Post
Courier service
Fax
Email
Where any tax, interest or penalty is payable in consequence of any order passed under the provisions of
the Act, the Assessing Officer shall serve upon the assessee a notice of demand in Form 1 specifying the
sum so payable
A notice would be deemed to have been duly served if the person has appeared in any proceeding or
co-operated in any inquiry relating to an assessment, except in case where such person has raised
objection before the completion of assessment. 67
COMMUNICATION UNDER THE ACT
68. Any assessee who is entitled or required to attend before any tax authority or the Appellate Tribunal, in
connection with any proceeding under this Act, may attend through an authorised representative.
“Authorised representative” means a person authorised by the assessee in writing to appear on his behalf,
being—
(a) a person related to the assessee in any manner, or a person regularly employed by the assessee;
(b) any officer of a scheduled bank with which the assessee maintains a current account or has other regular
dealings;
(c) any legal practitioner who is entitled to practice in any civil court in India;
(d) an accountant;
(e) any person who has passed any accountancy examination recognised in this behalf by the Board; or
(f) any person who has acquired such educational qualifications as may be prescribed. 68
AUTHORISED REPRESENTATIVE UNDER THE ACT
69. 69
AUTHORISED REPRESENTATIVE UNDER THE
ACT
The following persons shall not be qualified to represent an assessee namely:—
(a)a person who has been dismissed or removed from Government service;
(b) a legal practitioner, or an accountant, who is found guilty of misconduct in his
professional capacity by any authority entitled to institute disciplinary proceedings
against him;
(c) a person, not being a legal practitioner or an accountant, who is found guilty of
misconduct in any tax proceedings by such authority as may be prescribed
71. FAQ 1
Can the partner file declaration in
respect of such asset?
Foreign Assets
Indian Firm
No
72. FAQs 2, 3 & 4
Foreign Assets
Can the Company file a declaration
under Chapter VI of the Act?
Indian
Company
Yes
Would the directors have immunity?
Directors of the company shall not be liable for any
offence under the Income-tax Act, Wealth-tax Act,
FEMA, Companies Act and the Customs Act in respect
of declaration made in the name of the company.
What about immunity under other
Acts?
Not Available
73. FAQ 5
Where an undisclosed foreign asset is declared under Chapter VI of the
Act and tax and penalty is paid on its FMV then will the declarant be liable
for capital gains on sale of such asset in the future? If yes, then how will
the capital gains in such case be computed?
Yes, the declarant will be liable
Capital
Gain
Sale
Consideration
COA
OCA = FMV
since the asset
is taxed at
FMV
Period of holding shall start from the date of declaration of
such asset under Chapter VI of the Act
74. FAQ 6 & 7
Assessee142
143(2)
148
153A
153C
Notices
Is Assessee eligible for voluntary declaration u/s
59 of the Act?
Assessee will only be ineligible from declaration of those foreign assets which
have been acquired during the year for which a notice under section 142/
143(2)/ 148/ 153A/ 153C is issued and the proceeding is pending before the
Assessing Officer.
What if the notice was issued but not served on
the declarant?
The declarant will not be eligible for declaration where notice has been issued on or
before 30th day of June, 2015. The declarant is required to file a declaration regarding
receipt of any such notice in Form 6.
75. FAQ 8
Years not pending for Assessment Year pending for Assessment
Foreign Asset acquired in 2 different years
Notice served on or before 30-06-2015 - the undisclosed asset can be declared under Chapter VI of the Act.
While computing the amount of declaration the investment made in the asset during the previous year
relevant to the assessment year for which such notice is issued needs to be deducted from the FMV of the
asset. For this, the person shall provide a computation along with the declaration. Further, such investment
which is deducted from the fair market value shall be assessable in the assessment of the relevant assessment
year pending under the Income-tax Act and the person shall inform the Assessing Officer the investment made
during the relevant year in such asset.
76. FAQ 9
Can a declaration be made of undisclosed foreign assets which have
been assessed to tax and the case is pending before an Appellate
Authority?
• Section 65 - Declarant not entitled to re-open any assessment or
reassessment made under the Act. Therefore, he is not entitled to
avail the tax compliance in respect of those assets.
• However, he can voluntarily declare other undisclosed foreign assets
which have been acquired or made from income not disclosed and
consequently not assessed under the Income-tax Act.
77. FAQ 10
Can a person against whom a search/ survey operation has been
initiated file voluntary declaration under Chapter VI of the Act?
Not eligible if a search has been initiated and the time for issuance of
notice u/s 153A has not expired, even if such notice for the relevant A.Y
has not been issued.
Can file a declaration in respect of an undisclosed foreign asset acquired
in any P.Y in relation to an A.Y which is prior to A.Y relevant for the
purpose of notice under section 153A.
In case of survey operation the person is barred from making a declaration under
Chapter VI in respect of an undisclosed asset acquired in the P.Y in which the
survey was conducted. The person is, however, eligible to make a declaration in
respect of an undisclosed asset acquired in any other P.Y
78. FAQ 11 & 12
Where a search/ survey operation was conducted and the assessment has been completed but the
undisclosed foreign asset was not taxed, then whether such asset can be declared under Chapter VI
of the Act?
• Yes, such undisclosed asset can be declared under Chapter VI of the Act.
Whether a person is barred from voluntary declaration under Chapter VI of the Act if any information
has been received by the Government under DTAA?
• Sec 71(d)(iii) – A person cannot make a declaration of an undisclosed
foreign asset where the CG has received an information in respect of
such asset under the DTAA. The person is entitled for voluntary
declaration in respect of other undisclosed foreign assets for which
no information has been received.
79. FAQ 13
What if the Govt. already
received information of an
undisclosed foreign asset?
Is the declaration ineligible?
Declaration to be filed
by 30-09-2015
Intimation by
PC/Comm. by
31-10-2015 regarding
eligibility
80. FAQ 14
What are the consequences if no declaration under
Chapter VI of the Act is made in respect of
undisclosed foreign assets acquired prior to the
commencement of the Act?
• Such asset shall be deemed to have been acquired
in the year in which it comes to the notice of the
Assessing Officer and the provisions of the Act
shall apply accordingly.
81. FAQ 15 & 16
If a declaration of undisclosed foreign asset is made under Chapter VI of
the Act and the same was found ineligible due to the reason that
Government had prior information under DTAA then will the person be
liable for consequences under the Act?
• No action lies in respect of such assets under the Act. However, such
information may be used for the purpose of the Income-tax Act.
Where the proceedings under the Income-tax Act are initiated, can the
options of settlement commission etc. under the Income-tax Act be availed
in respect of such assets?
• All the provisions of the Income-tax Act shall be applicable in respect of
those assets.
82. FAQ 17
A person has some undisclosed foreign assets. If he declares
those assets in the Income-tax Return for A.Y. 2015-16 or say A.Y.
2014-15 (in belated return) then should he need to declare those
assets in the voluntary tax compliance under Chapter VI of the
Act?
The foreign asset is liable to be taxed under
the Act (whether reported in the return or not) if
the source of investment in such asset is
unexplained. Declaration should be made
under Chapter VI
83. FAQ 18
A person holds certain foreign assets which are fully explained and acquired out
of tax paid income. However, he has not reported these assets in Schedule FA of
the Income-tax Return in the past. Should he declare such assets under Chapter VI
of the Act?
If assets are fully explained – not treated as
undisclosed, then they are not to be declared
under Chapter VI of this Act
If not reported in Sch - FA of ITR – Penalty of Rs
10 L u/s 43
No Penalty if asset is 1 or more foreign bank a/c
with aggregate balance not exceeding 5L at any
time during the P.Y
84. FAQ 19
A person has been depositing and spending money
over the years. Now the balance is $500. Does he need
to pay tax on this $500 under the declaration?
Sec 59 –
Declaration of
undisclosed
asset, NOT
income
Tax on FMV
For bank A/c,
FMV = Sum of
all deposits in
the A/c as per
Rule 3(1)(e)
Tax & penalty
on such FMV
and not on the
balance as on
date
85. FAQ 20
Assessee
1994-95 to 1997-98
Undisclosed
Is declaration required under
Chapter VI?
The consequences of non-declaration may arise under the
Act at any time in the future when the information of such
account comes to the notice of the AO
86. FAQ 21
House property inherited from unexplained sources by Son from his
late father in 2003-04 and sold in 2011-12. Is declaration required?
What is the FMV?
Declaration required under Chapter VI by the son in the capacity
of legal representative of his father. The FMV of the property in
his case shall be higher of its cost of acquisition and the sale price
as per Rule 3(2) of the Rules.
87. FAQ 22
A person acquired a house property in a foreign country during 2000-01, from
unexplained sources of income and sold it in 2007-08 proceeds were deposited
in a foreign bank A/c. Does he need to declare both the assets under Chapter VI
and pay tax on both
Declaration required on both at FMV.
FMV
of HP
Higher of
Cost or SP
Amount
deposited in
bank a/c
88. FAQ 23
A person is a non-resident. However, he was a resident of India earlier and
had acquired foreign assets out of income chargeable to tax in India which
was not declared in the return of income or no return was filed in respect of
that income. Can that person file a declaration under Chapter VI of the Act?
Since the person was a resident in the year in which he had acquired
foreign assets (which were undisclosed) out of income chargeable to tax
in India, he is eligible to file a declaration under section 59 in respect of
those assets under Chapter VI of the Act.
89. FAQ 24 & 25
Resident assessee who was non-resident when assets were
acquired out of income which was not chargeable to tax in India.
Is declaration required?
No. Those assets do not fall under the definition of undisclosed
assets under the Act.
Assessee has 3 foreign assets and declares only 2. Will he get
immunity from the Act in respect of the 2 assets declared?
Immunity will be available for the 2 assets but not for the 3rd asset
which was not declared
90. FAQ 26
A resident earned income outside India, deposited in his foreign bank a/c
and was charged to tax in the foreign country when it was earned but the
same was not declared in the return of income in India and consequently
not taxed in India. Does he need to disclose such income under Chapter
VI?
The foreign bank account needs to be declared and no
credit of foreign taxes allowable in India as section 84 does
not provide for application of sections 90(1)(a)/90(1)(b)/
90A(1)(a)/ 90A(1)(b) of the Income-tax Act. Further, section
73 of the Act does not allow agreement with foreign
country for the purpose of granting relief in respect of tax
chargeable under the Act.
91. FAQ 27
Can a person declare under Chapter VI his undisclosed foreign assets which have
been acquired from money earned through corruption?
No. As per section 71(b) of the Act, Chapter VI shall not apply, inter-
alia, in relation to prosecution of any offence punishable under the
Prevention of Corruption Act, 1988.
92. FAQ 28
Foreign
Asset
Undisclosed
income
Tax Paid
Income
Only part of the investment is such foreign asset is undisclosed
(unexplained) hence declaration of such foreign asset may be
made under Chapter VI of the Act. Section 5 of the Act will apply
& value of undisclosed asset will be reduced by the amount of
income that has been assessed to tax in the past
93. FAQ 29 & 30
Should the undisclosed foreign
asset be held by the declarant on
the date of declaration?
The declaration may be made
even if the same has been
disposed off and is not held by
the declarant on the date of
declaration.
Will the Principal Commissioner/
Commissioner do any enquiry in
respect of the declaration made?
After declaration, the PC/ Comm
will enquire whether any
information has been received by
the competent authority in
respect of the asset declared.
94. FAQ 31 & 32
A person is a beneficiary in a
foreign asset. Is he eligible for
declaration under section 59 of
the Act?
Yes
A person was employed in a
foreign country where he
acquired or made an asset out
of income earned in that
country should it be declared?
No if the income was not
chargeable to tax in India