The Hon’ble Finance Minister in his budget speech for 2015-16 had proposed introduction of Black Money Bill in the Parliament. The Bill was passed by the Parliament in its budget session. The Bill received the assent of the President on May 26, 2015 and it became the law. It is to be called as “The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015” (“the Black Money Act”). It has been clarified by the Government that such Black Money Act would be applicable from July 1, 2015.
The Black Money Act provides for 30% tax on the value of undisclosed foreign income or assets with a penalty equivalent to three times of tax so computed. It further provides for prosecution of up to 10 years in case of willful attempt to evade tax on foreign income or assets held outside India.
The Black Money Act provides for compliance window, i.e., one-time opportunity for taxpayers to voluntarily disclose the undisclosed foreign income or assets. Declaration under compliance window can be made during the period from July 1, 2015 to September 30, 2015.Any person who opts for this compliance window shall be liable to pay reduced penalty of 100% of tax and would also get immunity from prosecution. Such taxes and penalty are required to be paid by declarant on or before December 31, 2015.
However, a person will not be eligible to obtain benefit of compliance window if any information regarding undisclosed foreign asset or income has been received by Government on or before June 30, 2015. Thus, taxpayers on HSBC list might be denied benefit of compliance window.
Declaration shall be void and shall be deemed to have never been made if the declarant –
a) Fails to pay the entire amount of tax and penalty on or before December 31, 2015, orb) 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 aforesaid reasons, then declarant would be liable to pay penalty three times of tax and will also be liable for prosecution.