<div><em>Those holding undisclosed foreign assets have been given a one-time window to come clean. But will they? asks <strong>Sunil Dhawan</strong></em></div><div> </div><div>The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015 is giving a one-time compliance opportunity for a limited period to persons who have any foreign assets which have not been disclosed for the purposes of Income-tax.</div><div> </div><div>In an earlier report, Assocham had put the amount of black money stashed abroad to the tune of nearly $2 trillion or Rs 120 lakh crore. It’s more than what India’s GDP was in 2013-14 when it stood at Rs 114 lakh crore or $1.9 trillion. </div><div> </div><div><strong>Compliance Window</strong></div><div>As of now, the last date to come clean and make a declaration before the designated Principal Commissioner or Commissioner of Income Tax (PCIT/CIT) is 30th September, 2015 and by 31st December, 2015, the tax and penalty needs to be paid. To disclose unaccounted foreign income and assets, one has to fill FORM 6 which is available at income tax department website. Filing option is both offline and online by using digital signature. </div><div> </div><div><strong>What’s The Penalty?</strong></div><div>The penalty is a flat rate of 30 per cent of the value of such undisclosed asset. In addition, the discloser would also be liable to pay penalty at the rate of 100 per cent of such tax (i.e., a further 30 per cent of the value of the asset). Therefore, in total the penalty comes to a total of 60 percent of the value of the undisclosed asset declared by him. The valuation of assets would be an interesting element in this saga. According to Amol Mishra, Head of Tax, myITreturn, an authorized e-return intermediary, “The value of such assets has to be determined on the basis of valuation report or FMV computation done by authorized valuers.”</div><div> </div><div>NRI earlier now resident: There may be instance when a person held NRI status earlier but now is a resident. The Act is clear on it too and necessitates them to pay up. Amol informs, “ If a person is a resident (as per provisions of Income-tax Act) in the year in which he had acquired undisclosed foreign assets out of undisclosed income chargeable to tax in India, he is required to file a declaration. The declaration should be made by such person of all undisclosed foreign assets acquired from undisclosed income chargeable to tax under the Income-tax Act for any assessment year prior to assessment year 2016-17. So the disclosure may be required, if the NRI was resident in India during one or more of such Assessment year/s and any foreign income has not been disclosed in Income-tax return or has escaped assessment under Income-tax Act, during such assessment year/s.”</div><div> </div><div>Will the plan work? How successful this one-time window would be to bring in the humongous amount of black money back in to the country remains to be seen. Mishra says, “It is difficult to estimate numbers at this moment. Taxpayers will go through the scheme, opt for expert advice and then decide on disclosures… Seeing the nuances involved and the implications of the provisions of this Act, we will allow filing of Form 6 only with the assistance of our experts.”</div><div> </div><div> </div><div> </div><div> </div><div> </div>
