New Delhi, July 6 (IANS) The government on Monday said immunity from prosecution would be given under specific laws to those declaring undisclosed foreign assets under the compliance window of the new Black Money (Undisclosed Foreign Income and Assets) Act.
Releasing a list of frequently asked questions (FAQs), the finance ministry said disclosures made under the said Act would have “immunity from prosecution under the Foreign Exchange Management Act (FEMA), Prevention of Money Laundering Act (PMLA), Income Tax Act, Wealth Tax Act, Companies Act and Customs Act”.
It, however, does not provide immunity from prosecution under any other statute.
Illustrating with an example, the ministry said if the undisclosed asset has been acquired out of the proceeds of sale of protected animals, the person will not be eligible for immunity under the Wildlife (Protection) Act.
The offence of wilful attempt to evade tax will also not be an offence under the PMLA, the FAQs said.
The one-time 90-day compliance window granted to foreign asset holders to make a declaration, however, does not guarantee immunity for wealth generated from corruption, it added.
On the compliance rule that bars persons against whom the government has prior information, the FAQs said declarations by such persons will be dealt under the Income Tax Act and not under the black money law that came into force last week.
This concession will be available only to those who have not received any intimation from the tax department having prior information about their foreign assets.
Persons making declarations will be intimated on whether the government has any prior information by October 31, a month after the end of the 90-day compliance window on September 30.
The ministry last week notified September 30 as the expiry date of the compliance window, while allowing those with undisclosed income and assets abroad time till December 31 to pay the levies.
“Hence, while people will have three months to declare their undeclared assets, they will have another three months to pay the penalties and taxes on the said assets,” a finance ministry press release said here.
The government last week also notified rules for calculating income and assets abroad under the Black Money Act.
The value of the overseas assets, including immovable property, jewellery and precious stones, archaeological collections and paintings, shares and securities and shares in unlisted firms abroad will be calculated at the fair market value, the Central Board of Direct Taxes (CBDT) said in a notification here.
The value of an overseas bank account will be the sum of all deposits made in the account since its opening, the CBDT said.
The Black Money Act, for the first time, allows levy of tax in India on assets kept abroad.
Unlawful, undisclosed income abroad has been taxed under this law at the rate of 30 percent with an additional 30 percent penalty.
The law provides for a compliance window for declaring and paying penalty. Failure to meet the compliance timeline will attract an additional penalty of 90 percent for a total tax liability of 120 percent on the quantum of black money stashed abroad.
Admitting that there was no official estimation on black money within India or stashed abroad, Finance Minister Arun Jaitley told parliament during its last budget session that the government was examining the reports of three institutes on the matter.
An unofficial estimate of illegal money stashed overseas puts it somewhere between $466 billion and $1.4 trillion.