All You need to know about Black Money Disclosure Scheme

During the presentation of Union Budget 2015-2016, Finance Minister Shri Arun Jaitely Ji, has announced the scheme of rigorous taxes and penalties on those who have Foreign Undisclosed Income and Assets. An act was made to provide the scope, taxation and penalties on Black money in Foreign. The Act was given assent by the President on 26th May, 2015 and is called BLACK MONEY (UNDISCLOSED FOREIGN INCOME AND ASSETS) AND IMPOSITION OF TAX ACT, 2015.

SALIENT FEATURES OF THE ACT

1. Tax at the rate of 30% starting from 1st April, 2016 on All Undisclosed Foreign Assets and Income.

2.Tax will be charged every Assessment year and not only in first year.

3. Total Income would include: Income from Foreign Sources (Undisclosed)+ Income from Foreign Sources (Disclosed but not in time) + Value of Foreign Assets

4. No Deduction of any expenses or any Set off of losses will be allowed

5. Deduction of Income Assessed earlier will be allowed.

6.  As per section 41, a Penalty at the rate of three times of the amount of tax will be levied for non disclosure. 

7. As per section 42 and 43 penalty of Rs. 10 lakhs for not furnishing the return of Income or wrong particulars in return of Income.

8. Prosecution of  3 years to 7 years for not furnishing of details before end of Assessment year.

VOLUNTARY DISCLOSURE OF FOREIGN ASSETS AND INCOME

The Act provides for Voluntary disclosure of Foreign Assets and Income and thus provide safety from Prosecution and Some penalty. The detail of which is given below:

1. VOLUNTARY DISCLOSURE

As per section 59 of the act, a person having or is beneficiary in Foreign Assets and Income can be Voluntarily disclose the same if.

a. he had, either failed to furnish a return under section 139 of the Income- tax Act or

b. failed to disclose such income in a return furnished before the date of commencement of the Act or

c. such income had escaped assessment by reason of the omission or failure on the part of such person to make a return under the Income- tax Act or to disclose fully and truly all material facts necessary for the assessment or otherwise

2. RATE OF TAX ON DISCLOSURE

Tax would be charged at the rate of 30% on the amount disclosed by the person. The rate is same as that of the Undisclosed Income and Assets.

3. PENALTY AND PROSECUTION

Penalty will be levied at the rate of 100 % of rate of taxes, thus making it equal to 30%. If a person voluntary discloses the Income and Asset, it will save 60% of the amount (Undisclosed penalty equals to 90%, thus (90 - 60)% = 30%). The person can also be secured from the prosecution as mentioned in the act.

4. TIME LIMIT FOR PAYMENT AND DISCLOSURE

As per the Notification no.57/2015,F.No.133/33/2015-TPL the date of disclosure is 30th September, 2015 and the date till which amount is to be paid is 31st December, 2015.

5. FORM FOR DECLARATION

Form for declaration if Form No. 6 and will be signed by the 

a.Individual-  Individual ; where individual is absent from India, person authorized by him ; where the individual is mentally incapacitated , his guardian or other person competent to act on his behalf. 

b. HUF-  Karta ; where the karta is absent from India or is mentally incapacitated from attending to his affairs, by any other adult member of the HUF

c. Company Managing Director; where for any unavoidable reason the managing director is not able to sign or there is no managing director, by any director.

d. Firm Managing partner; where for any unavoidable reason the managing partner is not able to sign the declaration, or where there is no managing partner, by any partner, not being a minor

e. Any other association Any member of the association or the principal officer.

f. Any other person That person or by some other person competent to act on his behalf.

6 DECLEARTION TO BE FILED TO WHOM

The deceleration will have to be filed with Commissioner of Income Tax- Delhi or can be efiled with the DSC of the authorized signatory.