The Union Finance Ministry said on Monday that the advantage of declaring foreign assets under the compliance window in the new black money law will not be available to those who were served notices by tax authorities before July 1.
Those persons whose cases are pending before an appellate authority will also not be eligible for the one-time offer, the Ministry said on Monday in FAQs on the new Black Money Act. “The declarant is not entitled to re-open any assessment or reassessment made under the Income Tax Act,” it clarified.
Declarations by persons against whom the government has prior information will be dealt with under the Income Tax Act and not under the stringent black money law, the Ministry said.
The government will by October 31 intimate persons making declarations on whether it had any prior information.
The one-time 90-day compliance window is being provided to foreign asset holders to come clean under the new law. The government will give immunity from prosecution under FEMA, Prevention of Money Laundering Act and four other laws to persons declaring undisclosed foreign assets under the compliance window. The offence of wilful attempt to evade tax will also not be an offence under the Prevention of Money Laundering Act (PMLA), it added.
It will, however, not guarantee immunity for wealth generated from corruption, the Ministry asserted.
Holders of foreign assets availing the compliance window will have to pay 30 per cent tax and an equivalent amount of penalty by December 31.
Disclosures made will enjoy immunity from prosecution under the Income-tax Act, Wealth Tax Act, FEMA, Companies Act and Customs Act.
The Ministry said that the compliance window will not provide immunity from other laws. For instance, if the undisclosed asset has been acquired out of the proceeds of sale of protected animals, the person will not be eligible for immunity under the Wildlife (Protection) Act, 1972.
On taxation of money in foreign bank account, the FAQ said the fair market value is the sum of all deposits made in the account computed in accordance with the rules. “Therefore, tax and penalty needs to be paid on such fair market value and not on the balance as on date,” it said.
