Black money law comes into force from Thursday

New Delhi, Oct 1 (IANS) With the compliance window closing, what is called India’s black money act, came into force from Thursday.

“Once the window is closed, the act with all its provisions will be enforced on defaulters,” Central Board of Direct Taxes (CBDT) chairperson Anita Kapur told the media here.

The Undisclosed Foreign Income and Assets (Imposition of Tax) Act, 2015, for the first time, allows levy of tax in India on assets kept abroad.

The law provides for a compliance window for declaring and paying penalty and a failure to meet the 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.

“It is for the persons who have assets abroad, and their conduct is not under our control, to take advantage or to ignore the opportunity,” Kapur said.

“We clarified a lot of queries of people. We also facilitated their filing till midnight (Wednesday), as we got some last minute requests from places other than Delhi,” she added.

India’s drive to get back ill-gotten wealth stashed away by its citizens abroad has drawn responses from 638 declarants for total assets worth Rs.3,770 crore ($580 million), an official statement said.

September 30 was the last date under the amnesty scheme, that called for a tax of 30 percent and an equal amount in penalty, to be paid before December 31. The compliance window opened on July 1.

In a second set of clarifications in the frequently asked questions (FAQs) format, the government last month reiterated total confidentiality of information furnished to unearth black money stashed abroad.

The finance minstry also relaxed conditions for those who cannot get bank statements of their foreign accounts, saying it would accept their “best estimate” declarations with a rider that a penalty would follow if disclosures were incomplete.

In the 27 FAQs, following those issued in July, on voluntary disclosures to be made in the 90-day compliance window ended September 30, the ministry said the new law incorporates the provisions of section 138 of the Income Tax Act relating to disclosure of information in respect of assesses.

The income tax department in an earlier list of FAQs, had also 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.

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 for declaring, however, does not guarantee immunity for wealth generated from corruption, it added.

India has no official estimate about the quantum of black money stashed away by Indians abroad but unofficial estimate puts the sum somewhere between $466 billion and $1.4 trillion.

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