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The Black Money Act, also known as the “Undisclosed Foreign Income and Assets Act, 2015,” is a crucial piece of legislation aimed at tackling the menace of black money or undisclosed foreign income and assets. In this blog, we will delve into the intricacies of the Black Money Act, providing a comprehensive overview of its provisions, structure, and significance in combatting black money.
Table of Contents
The Black Money Act was enacted by the Government of India in 2015 to curb the generation and circulation of black money, both within the country and overseas. It seeks to identify and penalize individuals who have undisclosed foreign income and assets, and to unearth such undisclosed income and assets. The Act empowers the government to impose stringent penalties and initiate criminal prosecution against offenders, while also providing a framework for the declaration of undisclosed income and assets and their subsequent taxation.
The Black Money Act, initially applicable only to residents of India, and was amended in July 2019 to include non-residents and non-ordinary residents who were ordinary residents in the last year to which the foreign income relates or in the year in which the foreign asset was acquired. The Black Money Act plays a crucial role in assessment of proceedings under the Income Tax Act, 1961, particularly in cases where undisclosed foreign income or assets are detected. The Act may be invoked by the Assessing Officer (AO) even during regular income tax assessment proceedings, and there is no separate requirement to file a return of income under this Act. The Act specifically covers two issues: undisclosed foreign income and undisclosed foreign assets.
The Act imposes a base tax of 30% on any undisclosed foreign income/foreign asset detected by the AO, in addition to a penalty of 90% (three times the amount of tax computed). There are also other penalties for non-disclosure of the required information and provisions for prosecution within the Act.
The Black Money Act contains several key provisions aimed at effectively combatting black money. Some of the significant provisions are:
The Black Money Act is a significant step towards curbing the menace of black money in India. It has several important implications, including:
The Black Money Act is a comprehensive legislation that seeks to tackle the issue of black money by providing a framework for the declaration, taxation, and enforcement of undisclosed foreign income and assets. Its stringent provisions, focus on international cooperation, and promotion of transparency and compliance make it a crucial tool in the government’s efforts to combat black money. It serves as a deterrent against the generation and circulation of black money and promotes fairness and equity in the tax system. Compliance with the Act is essential for individuals with undisclosed foreign income and assets to regularize their tax affairs and contribute to the formal economy.
Also Read: Undisclosed Foreign Income and Assets
Kiran is a multi-talented individual currently pursuing her final year of BBALLB at Chandigarh University. In addition to her studies, Kiran is also a dedicated legal content writer and researcher. She has a keen interest in the legal writing and is committed to using her knowledge and skills to produce informative and insightful content.
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