Taxing the “Black”
Moving one step forward in tracking foreign assets and black money stashed overseas, the Government of India has introduced The Black Money Act, 2015. It provides for one-time compliance (OTC) opportunity to pay 60% tax and penalty, legalize in India undisclosed assets and income held abroad by Indian residents and escape stringent provisions of the new Black Money Act. The one-time compliance ensures that no prosecution is launched against those who disclose their undeclared assets during the 90 day compliance window.
Buoyed with the recent success in obtaining information from Swiss authorities on undisclosed accounts of Indians in Swiss banks, “The Black Money Act” will serve as a strong deterrent to fake transactions, tax evasion and undeclared possession of property abroad using tax payer’s money. Residents who fail to make a disclosure of foreign income and assets is chargeable to 30% tax with a penalty of three times the tax due and rigorous imprisonment of between 3-10 years.
With the due date of declaring black money ending on 30th September, 2015; the Government of India has collected ₹2,488.2 crores from 638 disclosures worth ₹4,147 crores.
The Black Money Act is one of the crucial components of the Economic Reforms announced last year. India is third in the list of countries with black money stashed abroad. There is an urgent need to accelerate and step up efforts to retrieve stashed income, both in India and overseas. While the Black Money Act may have so far unearthed only part of the pot of evasive stashed money, its stringent implications and subsequent measures of the Government to crack down on black money, have sent a strong message that has been long overdue.
One can hope that it is Time for “whiter”days.