Black Money Bill – 10 Top Facts

The black money bill was passed by the Rajya Sabha.  Christened the
Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, it seeks to check the black money menace with stringent
provisions for those
stashing illegal wealth abroad. The Bill provides for separate taxation of any
undisclosed income in relation to foreign income and assets. Such income
will henceforth not be taxed under the Income-tax Act but under the
stringent provisions of the new legislation.

Here’s your 10-point cheat-sheet to the story:
1. According to the Undisclosed Foreign Income and Assets (Imposition of
New Tax) Bill, 2015, those who conceal income and assets and indulge in
tax evasion in relation to foreign assets can face rigorous imprisonment of
up to 10 years.
2. The offence will be non-compoundable and the offenders will not be
permitted to approach the Settlement Commission for resolution of
disputes.
3. There will also be a penalty of 300 per cent of taxes on the concealed
income and assets.
4. According to the Bill, undisclosed foreign income or assets shall be taxed
at the flat rate of 30 per cent. No exemption or deduction or set off of any
carried forward losses which may be admissible under the existing Income-
tax Act, 1961, shall be allowed. And concealment of income in relation to a
foreign asset will attract penalty equal to three times the amount of tax (90
per cent of the undisclosed income or the value of the undisclosed asset).
This would be over and above tax at a flat rate of 30 per cent.
5. The Bill also proposes to make concealment of income and evasion of
tax in relation to a foreign asset a ‘predicate offence’ under the Prevention
of Money Laundering Act, which will enable the enforcement agencies to
attach and confiscate the accounted assets held abroad and launch
proceedings.
6. It seeks to make non-filing of income tax returns or filing of returns with
inadequate disclosure of foreign assets liable for prosecution with
punishment of rigorous imprisonment of up to 7 years. To protect persons
holding foreign accounts with minor balances which may not have been
reported out of oversight or ignorance, it has been provided that failure to
report bank accounts with a maximum balance of upto Rs.5 lakh at any time
during the year will not entail penalty or prosecution.
7. The tax liability on an overseas property would be computed on the basis
of its current market price, not the price at which it was acquired.
8. The Bill provides for a short window for those holding overseas assets to
declare their wealth, pay taxes and penalties to escape punitive action.
Failure to furnish return in respect of foreign income or assets shall attract
a penalty of Rs.10 lakh. The same amount of penalty is prescribed for
cases where although the assessee has filed a return of income, but he has
not disclosed the foreign income and asset or has furnished inaccurate
particulars of the same.
9. The Income Tax assesses with overseas assets will get a one-time
opportunity for declaring them. The time-frame of the short window will be
notified after the passage of the bill.
10. The proposal to come out with a new law on black money was
announced by Finance Minister Arun Jaitley in his first full-year Budget in
February.