Giving an opportunity to tax evaders to come clean on ill-gotten money stashed abroad, the government on Wednesday announced a window of six months to disclose and pay up the tax on such undisclosed foreign assets to escape the prosecution under the new Black Money Act.
According to a statement issued by the Finance Ministry, tax evaders will have to make a declaration regarding the undisclosed assets abroad “on or before September 30, 2015” under the compliance provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Further, they have been given three more months, till December 31, to pay the tax and penalty on such undisclosed foreign assets so declared, the statement said.
The notification follows the announcement made by Finance Minister Arun Jaitley in the Budget that while a new legislation would be brought in to deal with illicit funds abroad, a one-time opportunity would be given to people to admit to such black money so as to escape the stringent punishments provided for in the new act.
However, this is not to say that the tax evaders will not be prosecuted under other acts such as the Prevention of Money Laundering Act (PMLA), if found guilty. The detailed features of the compliance window will be notified soon.
The new act was passed by Parliament in May, where Jaitley had warned those having such assets to utilise the compliance window because, “the world is no longer willing to tolerate tax havens which thrive in secrecy”.
However, the act will not cover those having amounts equivalent to Rs 5 lakh in bank accounts abroad, which may belong to students or those working there. Under the act, defaulters will have to pay 30 per cent tax and 30 per cent penalty under the compliance window.
However, those who do not declare their wealth in the window period will be liable to pay 30 per cent tax and 90 per cent penalty and could also face imprisonment that may vary from three to 10 years.