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No action under FEMA: CBDT
No action under FEMA: CBDT. The government has clarified that all those declaring overseas assets during the black money compliance window will not face any penalty or prosecution under FEMA and four other laws.
Black Money Disclosures
The 90-day compliance window provided to declare undisclosed overseas assets under the Black money (Undisclosed foreign income and assets) and Imposition of Tax Act, 2015 ends on Wednesday
New Delhi : The government has clarified that all those declaring overseas assets during the black money compliance window will not face any penalty or prosecution under FEMA and four other laws. The 90-day compliance window provided to declare undisclosed overseas assets under the Black money (Undisclosed foreign income and assets) and Imposition of Tax Act, 2015 ends on Wednesday.
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The CBDT, in a clarification, said that as per the Act, "declarations made under Section 59 shall not be admissible against the declarant for penalty/prosecution under FEMA". It added that for the declarations made "no penalty/ prosecution proceedings under the specified five enactments shall be applicable in relation to the asset declared".
The five enactments are Income-Tax Act, Wealth Tax Act, FEMA, Companies Act and Customs Act. In response to a specific question on whether a person has to disclose the shares of an unlisted foreign company received as gift, the CBDT said "where a satisfactory explanation for the asset exists, the same shall not constitute undisclosed foreign asset under the Act".
The undisclosed foreign asset, it clarified, is the one for which there is no satisfactory explanation for the source of investment. On whether the compliance window date shall be extended by three months, CBDT said "due date for filing a declaration under compliance window have already been notified".
Responding to a specific query that the black money generated through asset base which is legal should be accorded a lenient treatment, the CBDT said "the suggestion is not acceptable as it is contrary to the purpose for which the black money law has been enacted".
With regard to contribution made to the overseas pension funds, the tax department circular said the value of the contribution to pension funds would be higher of the total contribution or net asset value of the contribution. The valuation report, it added, will not be necessary for making a declaration.
The government had notified the Black Money Act on July 1 and provided for a 90-day compliance window to persons having undisclosed income to declare them, pay 60 per cent tax and penalty and come clean. Once the window closes, persons having undisclosed overseas assets will have to pay 120 per cent tax and penalty and face jail term which can extend up to 10 years.
