Jagran Josh Logo

Union Cabinet approved the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015

Mar 18, 2015 11:41 IST

The Union Cabinet on 17 March 2015 approved the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 to deal with cases relating to black money stashed away in other countries.

Important provisions of the Bill

  • Concealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with punishment of rigorous imprisonment up to 10 years.  
  • Offence of stashing unaccounted money abroad will be made non-compoundable (A non-compoundable offence is one in which the complainant (the government in this instance) does not enter into a compromise with the accused.
  • The offenders will not be permitted to approach the Settlement Commission
  • Penalty for such concealment of income and assets at the rate of 300% of tax shall be levied
  • The government will give a short window to those stashing black money abroad to declare their wealth, pay taxes and penalty, and escape prosecution under the proposed law.
  • Non filing of return or filing of return with inadequate disclosure of foreign assets will be liable for prosecution with punishment of rigorous imprisonment up to 7 years.
  • Income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate.  Exemptions or deductions which may otherwise be applicable in such cases shall not be allowed.
  • Beneficial owner or beneficiary of foreign assets will be mandatorily required to file return, even if there is no taxable income.
  • Abettors of the above offences, whether individuals, entities, banks or financial institutions will be liable for prosecution and penalty.
  • Date of Opening of foreign account would be mandatorily required to be specified by the assessee in the return of income.
  • The offence of concealment of income or evasion of tax in relation to a foreign asset will be made a predicate offence under the Prevention of Money-laundering Act, 2002 (PMLA). This provision would enable the enforcement agencies to attach and confiscate unaccounted assets held abroad and launch prosecution against persons indulging in laundering of black money.
  • The definition of proceeds of crime under PMLA is being amended to enable attachment and confiscation of equivalent asset in India where the asset located abroad cannot be forfeited.
  • The Foreign Exchange Management Act, 1999 (FEMA) will also be amended to the effect that if any foreign exchange, foreign security or any immovable property situated outside India is held in contravention of the provisions of this Act, then action may be taken for seizure and eventual confiscation of assets of equivalent value situated in India.  These contraventions are also being made liable for levy of penalty and prosecution with punishment of imprisonment up to five years.

Background

The Union Finance Minister Arun Jaitley while presenting the Union Budget 2015-16 on 28 February 2015 had spelled out government’s intention to bring a law in the budget session of the Parliament to curb black money stashed abroad.

Besides, he also had proposed following steps in the Union Budget 2015-16 to curb black money:

  • To introduce a more comprehensive Benami Transactions (Prohibition) Bill in the Parliament.
  • Quoting of PAN will be made mandatory for any purchase or sale exceeding the value of one lakh rupees.
  • There will be prohibition on acceptance or payment of an advance of 20000 rupees or more in cash for purchase of any immovable property.
  • The third party reporting entities would be required to furnish information about foreign currency sales and cross border transactions.

Is this article important for exams ? Yes27 People Agreed

Latest Videos

Register to get FREE updates

    All Fields Mandatory
  • (Ex:9123456789)
  • Please Select Your Interest
  • Please specify

  • ajax-loader
  • A verifcation code has been sent to
    your mobile number

    Please enter the verification code below

Newsletter Signup
Follow us on
This website uses cookie or similar technologies, to enhance your browsing experience and provide personalised recommendations. By continuing to use our website, you agree to our Privacy Policy and Cookie Policy. OK