The budget 2019 was announced on 5th July 2019 and finally the wait was over for various tax payers who had lot of expectations to get some tax relief after Modi 2.0 came into action.
Where this budget proved to be favorable for corporates and start-ups while in other hand it hit the upper rich class by imposing the high surcharge rate of 25% or 37%.
This budget not seems to be favorable also for the tax payers who used to fleet abroad just to avoid proceedings under black money Act (herein referred as “BM” Act) earlier as after the budget they would no longer be untouched by the provisions of BM act because this budget has widened the definition of assessee in the black money act with retrospective effect by bringing the NRIs into the ambit of BM Act.
Earlier to the amendment in budget 2019, the existing provisions of section 2 of BM Act was as under;
“assessee” means a person who is resident other than not ordinarily resident in India within the meaning of section 6 (6) of the Income-tax Act by whom tax in respect of undisclosed foreign income and assets are payable under the said Act.”
But now as per the new provisions;
“assessee” means a person, –– (a) being a resident in India within the meaning of section 6 of the Income-tax Act, 1961 in the previous year; or
(b) being a non-resident or not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act 1961 in the previous year, who was resident in India either in the previous year to which the income referred to in section 4 relates; or in the previous year in which the undisclosed asset located outside India was acquired”
The above amendment clearly shows the government’s intention to expand the coverage of notices issued under black money act to the assessee who were resident while acquiring the foreign assets or liabilities but subsequently became non-resident. The amendment also indicates towards the increase in future litigations under BM Act.
After demonetization and limiting the cash expenditure and receipts, one by one government is acting towards bringing more transparency in Indian tax structure and this amendment seems a part of it and hope these provisions achieve such purposes rather that turning out as an unnecessary harassment for the tax payers.