The Finance Bill 2024 proposes an amendment to Section 132B of the Income-tax Act, 1961, to include the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Currently, Section 132B allows the recovery of liabilities under various tax acts, such as the Income-tax Act and Wealth-tax Act, from seized or requisitioned assets. However, it does not cover liabilities arising under the Black Money Act, which addresses undisclosed foreign income and assets. The proposed amendment will enable the recovery of such liabilities under the Black Money Act from seized assets, aligning it with other tax liabilities. This change aims to streamline the enforcement of tax laws by ensuring that all relevant liabilities, including those related to undisclosed foreign assets, can be recovered effectively. The new provisions will come into effect on October 1, 2024.
Budget 2024: Adjusting liability under Black Money Act, 2015 against seized assets
Section 132B of the Act in its existing form provides that any existing liability under the Income-tax Act, 1961, the Wealth-tax Act, 1957(27 of 1957), the Expenditure-tax Act, 1987 (35 of 1987), the Gift-tax Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45 of 1974), and the amount of liability determined on completion of the assessment or reassessment in consequence of search or requisition, may be recovered from the taxpayer out of the seized assets under section 132 or requisitioned under section 132.
2. Further, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provides for taxation of undisclosed foreign income and undisclosed foreign assets. After the introduction of the said Act, such undisclosed foreign income and value of undisclosed foreign asset is taxed under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in place of the Income-tax Act, 1961.
3. In this regard, it has been observed that most of the liabilities arising under the Acts administered by the Central Board of Direct Taxes (CBDT) have been covered in section 132B of the Act, for the purpose of extinguishment of liability by recovery out of the seized assets, except the liabilities arising under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
4. In view of the above, it is proposed to insert the reference of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in the section 132B of the Income-tax Act, 1961 so as to recover the existing liabilities under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, out of seized assets.
5. This amendment will take effect from the 1st day of October, 2024.
[Clause 40]
Extract of Clause 40 of Finance Bill 2024
Clause 40 of the Bill seeks to amend section 132B of the Income-tax Act relating to application of seized or requisitioned assets.
The said section provides that the amount of any existing liability under the Income-tax Act, the Wealth-tax Act, 1957, the Expenditure-tax Act, 1987, the Gift-tax Act, 1958 and the Interest-tax Act, 1974, and the amount of liability determined on completion of the assessment or reassessment or recomputation and the assessment of the year relevant to the previous year in which search is initiated or requisition is made, or the amount of liability determined, etc., as given in the section may be recovered from the taxpayer out of seized or requisitioned assets under section 132 or requisitioned under section 132A.
The provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 provides for taxation of undisclosed foreign income and undisclosed foreign assets and such undisclosed foreign income and value of undisclosed foreign asset is taxed under the said Act instead of the Income-tax Act.
It is proposed to amend the clause (i) of sub-section (1) of the said section to provide the reference of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 so as to recover the existing liabilities under the said out of seized assets.
This amendment will take effect from 1st October, 2024.
Amendment of section 132B.
In section 132B of the Income-tax Act, in sub-section (1), in clause (i), for the words and figures “and the Interest-tax Act, 1974”, the words, brackets and figures “the Interest-tax Act, 1974 and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015” shall be substituted with effect from the 1st day of October, 2024.
