PRESS INFORMATION BUREAU
GOVERNMENT OF INDIA
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HIGHLIGHTS OF THE UNDISCLOSED FOREIGN INCOME AND ASSETS (IMPOSITION OF TAX) BILL, 2015 INTRODUCED IN LOK SABHA TODAY
New Delhi, March 20, 2015
Phalguna 29, 1936
The Finance Minister, in his budget speech, while acknowledging the limitations under the existing law, had conveyed the considered decision of the Government to enact a comprehensive new law on black money to specifically deal with black money stashed away abroad. He also promised to
introduce the new Bill in the current Session of the Parliament.
In order to fulfil the commitment made by the Government to the people of India through the Parliament, the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 has been introduced in the Parliament on 20.03.2015. The Bill provides for separate taxation of any undisclosed
income in relation to foreign income and assets. Such income will henceforth not be taxed under the Income-tax Act but under the stringent provisions of the proposed new legislation.
The salient features of the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 are as under:-
Scope – The Act will apply to all persons resident in India. Provisions of the Act will apply to both undisclosed foreign income and assets (including financial interest in any entity).
Rate of tax – Undisclosed foreign income or assets shall be taxed at the flat rate of 30 percent. No exemption or deduction or set off of any carried forward losses which may be admissible under the existing Income-tax Act, 1961, shall be allowed.
Penalties – Violation of the provisions of the proposed new legislation will entail stringent penalties.
The penalty for non-disclosure of income or an asset located outside India will be equal to three times the amount of tax payable thereon, i.e., 90 percent of the undisclosed income or the value of the undisclosed asset. This is in addition to tax payable at 30%.
Failure to furnish return in respect of foreign income or assets shall attract a penalty of Rs.10 lakh. The same amount of penalty is prescribed for cases where although the assessee has filed a return of income, but he has not disclosed the foreign income and asset or has furnished inaccurate particulars of the same.
Prosecutions – The Bill proposes enhanced punishment for various types of violations. The punishment for willful attempt to evade tax in relation to a foreign income or an asset located outside India will be rigorous imprisonment from three years to ten years. In addition, it will also entail a fine.
Failure to furnish a return in respect of foreign assets and bank accounts or income will be punishable with rigorous imprisonment for a term of six months to seven years. The same term of punishment is prescribed for cases where although the assessee has filed a return of income, but has not disclosed the foreign asset or has furnished inaccurate particulars of the same.
The above provisions will also apply to beneficial owners or beneficiaries of such illegal foreign assets.
Abetment or inducement of another person to make a false return or a false account or statement or declaration under the Act will be punishable with rigorous imprisonment from six months to seven years. This provision will also apply to banks and financial institutions aiding in concealment of foreign income or assets of resident Indians or falsification of documents.
Safeguards – The principles of natural justice and due process of law have been embedded in the Act by laying down the requirement of mandatory issue of notices to the person against whom proceedings are being initiated, grant of opportunity of being heard, necessity of taking the evidence
produced by him into account, recording of reasons, passing of orders in writing, limitation of time for various actions of the tax authority, etc. Further, the right of appeal has been protected by providing for appeals to the Income-tax Appellate Tribunal, and to the jurisdictional High Court and
the Supreme Court on substantial questions of law.
To protect persons holding foreign accounts with minor balances which may not have been reported out of oversight or ignorance, it has been provided that failure to report bank accounts with a maximum balance of upto Rs.5 lakh at any time during the year will not entail penalty or prosecution.
Other safeguards and internal control mechanisms will be prescribed in the Rules.
One time compliance opportunity – The Bill also provides a one time compliance opportunity for a limited period to persons who have any undisclosed foreign assets which have hitherto not been disclosed for the purposes of Income-tax. Such persons may file a declaration before the specified tax authority within a specified period, followed by payment of tax at the rate of 30 percent and an equal amount by way of penalty. Such persons will not be prosecuted under the stringent provisions of the new Act. It is to be noted that this is not an amnesty scheme as no immunity from penalty is being offered. It is merely an opportunity for persons to come clean and become compliant before the stringent provisions of the new Act come into force.
Amendment of PMLA – The Bill also proposes to amend Prevention of Money Laundering Act (PMLA), 2002 to include offence of tax evasion under the proposed legislation as a scheduled offence under PMLA.
Thus, in keeping with the commitment of the government for focussed action on black money front, an unprecedented and multi-pronged attack has been launched to root out the menace of black money. The Government is confident that this new law will act as a strong deterrent and curb the menace
of black money stashed abroad by Indians.
Published: March 20, 2015 16:45 IST | Updated: March 20, 2015 16:45 IST
Blackmoney Bill in Lok Sabha; 10 years jail for concealing foreign funds
Reuters
A Bill proposing to prosecute those stashing illicit wealth abroad with 10 year rigorous imprisonment and providing for a window to persons seeking to come clean on such undisclosed assets, was introduced in Lok Sabha on Friday.A Bill proposing to prosecute those stashing illicit wealth abroad with 10 year rigorous imprisonment and providing for a window to persons seeking to come clean on such undisclosed assets, was introduced in Lok Sabha on Friday.
Finance Minister Arun Jaitley introduced ‘The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015,’ proposing that it would come into effect from April 1, 2016.
“Recognizing the limitations of the existing legislation, it is proposed to introduce a new legislation to deal with undisclosed assets and income stashed away abroad,” said the Statement on Objects and Reasons of the Bill.
The Bill provides for criminal liability with enhanced punishment with 3-10 year imprisonment for willful attempt to evade tax in relation to foreign income, along with a fine.
Second and subsequent offence would be punishable with rigorous imprisonment for a term of 3-10 years with a fine of Rs. 25 lakh to Rs. 1 crore.
“In prosecution proceedings, the wilful nature of the default shall be presumed and it shall be for the accused to prove the absence of the guilty state of mind,” it added.
The Bill also provides for a penalty of three times the amount of tax for concealment of income in relation to a foreign asset.
Further, a penalty of Rs. 10 lakh would be levied for failure to furnish return of income by persons holding foreign asset, failure to disclose foreign asset in the returns or furnishing of inaccurate particulars of such asset.
The Bill proposes a limited window to persons who have any undisclosed foreign assets who wish to come clean.
“Such persons may file a declaration before the specified tax authority within a specified period, followed by payment of tax at the rate of 30 per cent and an equal amount by way of penalty,” it said.
“It is merely an opportunity for persons to become tax compliant before the stringent provisions of the new legislation come into force,” the statement said.
The Bill, however, protects persons holding foreign accounts with minor balances which may not have been reported out of oversight or ignorance, from criminal consequences.
“Evasion of tax robs the nation of critical resources necessary to undertake programmes for social inclusion and economic development. It also puts a disproportionate burden on the honest tax payers as they have to bear the brunt of higher taxes to make up for the revenue leakage caused by evasion,” it said.
Under the measure, the tax authorities have been vested with powers of discovery and inspection, issue of summonses, enforcement of attendance, production of evidence and impounding of books of account and documents.
It also provides for adequate safeguards, making it mandatory to issue notices and grant opportunity to the assessee of being heard.
Appeal to the ITAT, High Courts and Supreme Court has also been provided to safeguard the interest of the assessee.
As per the Bill, the Government have been empowered to enter into agreements with other countries or jurisdictions for exchange of information, recovery of tax and avoidance of double taxation.
Amendments to the Prevention of Money Laundering Act (PMLA), 2002, would be carried out to include offence of tax evasion as a scheduled offence under the Act.
Referring to the new legislation, Mr. Jaitley had on Thursday said: “we are going to make sure that there is no scope for misuse, but at the same time there is a deterrent for those who stock money abroad“.
The proposal to come out with a new law on the black money was announced by Jaitley in his Budget speech last month.
The issue of black money, especially alleged stashing of illicit wealth abroad in places like Switzerland, has been a matter of huge political debate for a long time.
http://www.thehindu.com/news/national/blackmoney-bill-in-lok-sabha-10-years-jail-for-concealing-foreign-funds/article7015589.ece?homepage=true
Govt introduces black money Bill
The Hindu
New Delhi, March 20:
The Government has introduced a comprehensive new legislation on black money in Parliament on Friday, to tackle money stashed away abroad.
The proposed Bill, titled the Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, has provision for imprisonment up to 10 years for concealing a foreign account, tax at the rate of 30 per cent along with penalty at the rate of 300 per cent of tax dues, no compounding and no settlement etc. It also provides for a small window for those holding overseas assets to declare their wealth, pay taxes and penalties to escape punitive action.
The Bill also proposes to make concealment of income and evasion of tax in relation to a foreign asset a ‘predicate offence’ under the Prevention of Money Laundering Act (PMLA) , which will enable the enforcement agencies to attach and confiscate the accounted assets held abroad and launch proceedings. It also seeks to make non-filing of income-tax returns or filing of returns with inadequate disclosure of foreign assets liable for prosecution, with punishment of rigorous imprisonment of up to 7 years.
The proposal to come out with a new law on black money was announced by Finance Minister Arun Jaitley in his Budget speech last month. The issue of black money, especially stashing of illicit wealth abroad in places, such as Switzerland, has been a matter of debate for a long time. In fact, this was a major issue for the ruling BJP during its election campaign when it promised to work toward curbing such illicit money.
Also read: Alert: FM on the black money trail
The new legislation has been conceptualised keeping this in mind. Once enacted, it will be mandatory for the beneficial owner or beneficiary of foreign assets to file returns, even if there is no taxable income. The date of opening of foreign account will be mandatorily required to be specified by the assessee in the income returns. The definition of ‘proceeds of crime’ under PMLA is also being amended to enable attachment and confiscation of equivalent assets in India where the assets located abroad cannot be forfeited.
(This article was published on March 20, 2015)
http://www.thehindubusinessline.com/economy/govt-introduces-black-money-bill/article7015398.ece?homepage=true&css=print