New Delhi: The black money law that provides for stringent penalties and jail term for failing to disclose overseas income has been operational from July 1 this year, instead of April 2016, the Finance Ministry said.
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, as passed by Parliament, was to come into effect from April 1, 2016, after providing for a short 'compliance window' to foreign asset holders to come clean. When asked whether the black money law has come into force, a top revenue department official confirmed. "Yes, with effect from July 1".
The changes were being made to remove the difficulties with regard to dates for implementation of the provisions of the new black money law, a Finance Ministry Order said. In the order, the Ministry said, the provisions of the Act were intended for application in the Assessment Year 2016-17. But for this to happen the Act has to come into effect from current fiscal and the necessary change have now been made as per the powers given by the law passed by Parliament in May this year.
The Order came along side the notification of a 90-day compliance window lasting till September 30 for holders of unaccounted foreign income and assets to declare them. After declaring assets they will have time till December 31 to pay non-punitive tax and penalty of 30 per cent each to escape stringent punishment including jail term.
The Finance Ministry Order said "for the words, figures and letters 'the 1st day of April, 2016,' the words, figures and letters 'the 1st day of July 2015' shall be substituted (in Section 1 (3) of the Act)". In the Act, which received Presidential assent on May 26, Section 1 (3) had said "...it (Act) shall come into force from 1st day of April, 2016".
Once the compliance window closes, anyone found having undeclared overseas wealth would be required to pay 30 per cent tax, 90 per cent penalty and face criminal prosecution. The revenue department will soon come out with an Frequently Asked Questions (FAQs) to guide the assesses with regard to declaration of undisclosed assets, payment of tax and penalty.