CA Chirag Gupta
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 deals with the problem of black money i.e. undisclosed foreign income & assets, procedure for dealing with such income and assets and to provide for imposition of tax on any undisclosed foreign income and asset held outside India and for matters connected therewith or incidental thereto.
Key Highlights of the Act
♠ Date of enforcement – 1st April, 2016.
♠ Applicable to – Every assessee.
♠ Meaning of assesse – a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, by whom tax in respect of undisclosed foreign income and assets, or any other sum of money, is payable under this Act and includes every person who is deemed to be an assessee in default under this Act.
♠ Meaning of undisclosed asset located outside India – an asset (including financial interest in any entity) located outside India which belongs to assessee or for which assessee is the beneficial owner and has no explanation about its source of investment in such asset or the explanation given by him is in the opinion of Assessing Officer (A.O) unsatisfactory.
♠ Meaning of foreign income – total amount of undisclosed income of an assessee from a source located outside India.
♠ Charge of tax – Tax at the rate of 30% on value of undisclosed income and asset.
♠ What is the scope of total undisclosed foreign income and asset?
♠ No expenditure, set off or carry forward loss shall be allowed against income.
♠ Let’s understand it with an Illustration :-
A= Rs.1 crore, B= Rs. (100 x 20/50) lakh= Rs.40 lakh, C= Rs. (100-40) lakh=Rs.60 lakh.
♠ Penalty – In addition to tax, penalty at 3 times the amount of tax (i.e. 90% of amount of tax) shall be levied.
Further, if residents fails to furnish return of income u/s 139 of Income-tax Act or furnishes incorrect particulars, he shall be liable to penalty of Rs.10lakh, if –
♠ Prosecution –
♠ One time window (time period lapse now) – voluntary disclosure of undisclosed income or asset.
Do you think CBDT should extend Tax Audit Report and relevant ITR Due Date? Please Comment, Vote, Retweet and Like.— Tax Guru (@taxguru_in) September 18, 2018