Black money
in common parlance stand for illegally obtained income or income not declared
for tax purposes. It includes money generated through undisclosed activities
under the guise of black money. This black money is neither reported to the
public authorities at the time of their generation nor disclosed during their
possession. Black money and imposition of tax act 2015 aspires to ruin undisclosed
foreign assets and income and impose penalty on such income. It is a preliminary step as the universe is
shifting to an “Automatic exchange of information” where governments can get
the information about domestic resident’s income assets in foreign countries.
Since information is available to punish such black income holder such act was
passed. The act being passed by both the houses of parliament and has also
received the acceptance of the president of India on 26 may 2015. Chargeability
of BMA is confined to persons residing in India, tax applicable on such undisclosed
income and assets is to be paid at the flat rate of 30 %. It’s one-time tax
compliance window came into effect from 1 July 2015 enhancing punishment of
imprisonment for 3-10 years for willful prevarication of tax on foreign income
along with penalty equal to three times the amount of tax evaded. File return
failure of black money will stand a penalty of 10 lakh. Concealed income and
assets possess a penalty of 300 % tax. Thus, the act aims to create an
administrative and penal machinery to address this practice of black money and
make provisions to deal with problem of undeclared foreign income and assets. Residents
holding undeclared assets and bank account in Singapore can be in trouble
because these two countries exchanging the data under the agreement signed by
them i.e. revised double taxation avoidance agreement (DTAA) got enforced last
year.
Thank You
Regards
Author: Twinkle
Kautilya
IBS Mumbai
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