In a step towards delivering on the BJP’s poll promise of unearthing black money stashed abroad, government has introduced the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, in the parliament.
Here are the salient features of the Bill
| 1 | Tax on all foreign income will have to be paid at the flat rate of 30 per cent without any exemption, deduction, set off or carry forward losses that the Income Tax Act permits. |
| 2 | Enhanced punishment of jail for 3-10 years for wilful evasion of tax on foreign income along with a penalty equal to three times the amount of tax evaded or 90 per cent of the undisclosed income or the value of the asset. |
| 3 | There is a limited compliance window offer. Offenders would have to pay tax at the rate of 30 per cent but concessional penalty would be equal to the tax amount. |
| 4 | Failure to file returns of foreign income or assets will attract a penalty of Rs. 10 lakh. |
| 5 | Second and subsequent offence will be punishable with rigorous imprisonment of 3-10 years with a fine of up to Rs. 1 crore. |
| 6 | Undisclosed holdings of less than Rs. 5 lakh at any time during a year not reported out of oversight or ignorance will not entail penalty or prosecution. |
| 7 | The Bill empowers the Centre to enter into agreements with other countries for the exchange of information, recovery of tax and avoidance of double taxation. |
| 8 | To include tax evasion under the proposed legislation as a scheduled offence the Bill proposes to amend the Prevention of Money Laundering Act, 2002. |
| 9 | The right to appeal will be to the Income Tax Appellate Tribunal and to jurisdictional High Courts and the Supreme Court on substantial questions of law. |
| 10 | The tax authorities will have powers of discovery and inspection, issue of summonses, enforcement of attendance, production of evidence and impounding of account books and documents. |
