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After social media outrage over a Budget proposal making it mandatory to get <keyword id="22574399" type="General" weightage="100" keywordseo="tax-clearance-certificate" source="keywords">tax clearance certificate</keyword>s for going abroad, the government on Sunday clarified that the proposed amendment is not for all, and only those accused of financial irregularities or having substantial tax arrears need such clearance. The <keyword id="19955404" type="General" weightage="20" keywordseo="finance" source="keywords">finance</keyword> ministry, in the Finance Bill, 2024, has proposed to add the reference of the <keyword id="20961832" type="General" weightage="20" keywordseo="Black-Money-Act" source="keywords">Black Money Act</keyword>, 2015, to the list of Acts, under which any person should clear his liabilities to obtain the tax clearance certificate. "The proposed amendment does not require all the residents to obtain the tax clearance certificate," the ministry said in a statement. As per section 230 of the Income-tax Act, 1961, every person is not required to obtain a tax clearance certificate. Only in the case of certain persons, in respect of whom circumstances exist, which make it necessary to obtain a tax clearance certificate will be required to obtain such a certificate. The ministry said that the Income Tax department through a 2004 notification has specified that the tax clearance certificate may be required to be obtained by persons domiciled in India only in certain circumstances. These include - where the person is involved in <keyword id="22576180" type="General" weightage="20" keywordseo="serious-financial-irregularities" source="keywords">serious financial irregularities</keyword> and his presence is necessary in the investigation of cases under the Income-tax Act or the Wealth-tax Act and it is likely that a tax demand will be raised against him, or where the person has direct tax arrears exceeding Rs 10 lakh outstanding against him, which have not been stayed by any authority. The I-T department said that a person can be asked to obtain a tax clearance certificate only after recording the reasons for the same and after taking approval from the Principal Chief Commissioner of Income-tax or Chief Commissioner of Income-tax. Such a certificate is required to be issued by the income-tax authority, stating that such person has no liabilities under the Income-tax Act, or the Wealth-tax Act, 1957, or the Gift-tax Act, 1958, or the Expenditure-tax Act, 1987, it added.

After outrage, Govt clarifies: tax clearance certificate only for people with tax dues, high-value defaulters

The finance ministry said it has received Rs 3,770 crore from 638 declarations under the one-time <a href="http://www.businessinsider.in/searchresult.cms?query=black+money">black money</a> compliance window under the new anti-Black Money Act. 
 
The deadline to make <a href="http://www.businessinsider.in/Fin-Min-cracks-the-whip-on-black-money-Disclose-your-foreign-incomeand-assets-or-face-consequences/articleshow/47899820.cms">declarations</a> was September 30. 
 
"638 number of declarations have been received under the compliance window declaring undisclosed foreign assets amounting to Rs 3770 crore. These figures are subject to final reconciliation," the Finance Ministry said in a statement based on figures provided to it by the CBDT. 
 
The ministry further stated tax at 30% rate and penalty at 30% is to be paid by December 31 this year. 
 
READ ALSO: <a href="http://www.businessinsider.in/Black-money-blues-Promoters-are-working-overtime-to-utilise-unaccounted-funds/articleshow/49149924.cms">Black money blues? Promoters are working overtime to utilise unaccounted funds!</a> 
 The <keyword id="6356023" type="UNKNOWN" weightage="20" keywordseo="Black-Money">Black Money</keyword> (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was enacted to deal with <a href="http://www.businessinsider.in/Heres-what-Indians-residing-abroad-can-do-to-avoid-law-suit-under-the-Black-Money-Law/articleshow/47989798.cms">black money stashed abroad</a>. 
 
"The Act also provided for a compliance window for a limited period to persons who have undisclosed foreign assets which they had not disclosed for the purposes of Income-tax so far," the statement added. 
 
The compliance window opened on July 1 this year. 
 
(Image: Thinkstock)

Govt’s Black Money declaration drive has flopped! Only 638 declarations made amounting to just Rs 3,770 cr

<ul><li><keyword id="1673591" type="General" weightage="20" keywordseo="indian-residents" source="Orion">Indian residents</keyword> are required to report their foreign investments, which may include holdings in foreign <keyword id="6354298" type="General" weightage="20" keywordseo="stocks" source="Orion">stocks</keyword>, bonds, or other financial instruments. </li><li>Ownership of foreign real estate, whether residential or commercial, must be reported to Indian tax authorities. </li><li>If you possess ESOPs from a foreign company, you are required to disclose these foreign holdings when filing your <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword> return. </li></ul>Recently, the IT Appellate Tribunal of Mumbai imposed a penalty of ₹10 lakh per year on <keyword id="59866" type="General" weightage="20" keywordseo="taxpayers" source="Orion">taxpayers</keyword> who failed to report <keyword id="466213" type="General" weightage="20" keywordseo="foreign-assets" source="Orion">foreign assets</keyword> under schedule FA of the income tax return (ITR) form. The penalty was levied under black money Act. Compared to the Income Tax Act, the penalty under the black money act is enormous. "The ITAT decision is a wake-up call for many working professionals and NRIs regarding the complexity of tax compliance in India; even if the taxpayer has paid their taxes, mere non-disclosure results in hefty penalties,” says Suneel Dasari, CEO and founder, EZtax.in. Here's a breakdown of the key foreign assets and income that must be disclosed in the income tax returns. <cmsannotation type="cmsannotation" annotationid="Foreign investments" comment="Subhead" text="Foreign investments">Foreign investments</cmsannotation>: Indian residents are required to report their foreign investments, which may include holdings in foreign stocks, bonds, mutual funds, or other financial instruments. This reporting extends to income generated from these investments, such as dividends, interest, or capital gains. Individuals need to disclose the nature and value of these investments in their tax returns. For example, if you have invested in shares of Microsoft or Apple, the investments and any income from them, need to be disclosed when filing your tax returns. <cmsannotation type="cmsannotation" annotationid="ESOPs" comment="subhead" text="ESOPs">ESOPs</cmsannotation>: If you possess employee stock ownership plans (ESOPs) from a foreign company, you are required to disclose these foreign holdings when filing your income tax return, typically under schedule FA. “In India, when an Indian employee is allotted shares of a foreign parent company as a part of their compensation or as an employee stock option plan (ESOP), it is considered an investment in foreign assets,” says Abhishek Soni, CEO, Tax2Win.in, a tax filing platform. Foreign bank accounts: Any foreign bank accounts, whether savings, current, or fixed deposit accounts, must be reported. This includes accounts held individually or jointly, along with details such as the name of the bank, account numbers, and the highest balance maintained during the financial year. <cmsannotation type="cmsannotation" annotationid="Foreign real estate" comment="Subhead" text="Foreign real estate">Foreign real estate</cmsannotation>: Ownership of foreign real estate, whether residential or commercial, must be reported to Indian tax authorities. This includes details about the property's location, current market value, and any income generated from it, such as rental income. “Any rental income or capital gains from selling these assets may be subject to taxation,” says Soni. <cmsannotation type="cmsannotation" annotationid="Financial or beneficial interest in overseas entities" comment="Subhead" text="Financial or beneficial interest in overseas entities">Financial or beneficial interest in overseas entities</cmsannotation>: In case an individual possesses a financial or beneficial stake in any overseas entity, such as serving as a partner in an overseas limited liability partnership (LLP) or firm, or receiving benefits from a foreign private trust, it is imperative to disclose this interest in accordance with tax regulations. “Residents in India with foreign income from ESOPs, or the voluntary purchase of foreign stock or other non-tangible instruments are at risk due to country or central bank level reciprocity agreements that would allow the Indian government access to information that would otherwise be unavailable,” says Dasari. Non-declaration also revokes your right to claim relief under the double taxation avoidance agreement for your foreign income. Hence it is critical to disclose such foreign assets in the schedule FA of ITR.

Have foreign assets or income? Not disclosing it may lead to heavy penalties

<ul><li>The <keyword id="6354977" type="ORGANIZATION" weightage="20" keywordseo="Supreme-Court">Supreme Court</keyword> stayed an order by the <keyword id="6355014" type="UNKNOWN" weightage="20" keywordseo="delhi-high-court">Delhi High Court</keyword> that prevented the Income Tax (IT) Department from trying <keyword id="1561203" type="PERSON" weightage="20" keywordseo="Gautam-Khaitan">Gautam Khaitan</keyword> - the main accused in the Agusta Westland chopper scam - under the Black Money Act of 2016. </li><li>The central government had asked the Delhi HC to allow the 2016 law to be applied to Khaitan’s case, which was filed in July 2015. </li><li>The 2016 law is much more stringent when it comes to dealing with previously undisclosed income and assets held abroad. </li><li>The punishment for conviction under this law for wilful evasion is enhanced, and tax authorities have more power when it comes to inspection and issue of summons. </li></ul>The Supreme Court today stayed an order by the Delhi High Court that prevented the Income Tax (IT) Department from trying Gautam Khaitan - the main accused in the Agusta Westland chopper scam - under the Black Money Act of 2016. The Delhi HC’s order, which was handed out on May 16, prohibited the IT Dept. from taking action against Khaitan - retroactively - under the law. Khaitan filed a petition against the government for trying to invoke the law, which came into effect in April 2016. The central government had asked the Delhi HC to allow the 2016 law to be applied to Khaitan’s case, which was filed in July 2015. The 2016 law is much <a href="https://www.thehindu.com/news/national/10-things-to-know-about-blackmoney-bill/article7194290.ece">more stringent</a> when it comes to dealing with previously undisclosed income and assets held abroad. The punishment for conviction under this law for wilful evasion is enhanced, and tax authorities have more power when it comes to inspection and issue of summons. As things stand, the Supreme Court’s decision requires Khaitan, a lawyer by profession, to submit a formal response to the central government’s allegations against him, within six weeks. Khaitan had been investigated by a slew of regulators, including the <keyword id="6357808" type="DEFINITION" weightage="20" keywordseo="enforcement-directorate">Enforcement Directorate</keyword> (ED) and the Central Bureau of Investigation (CBI) for his role in the ₹36 billion scam. The Agusta Westland scam came to light in 2013, and pertains to the UPA government’s purchase of 12 helicopters to transport top officials. The deal was cancelled in 2014 following allegations that Bruno Spagnolini, CEO of <keyword id="252971" type="COMPANY" weightage="20" keywordseo="AgustaWestland">AgustaWestland</keyword>, along with other executives had bribed officials from the <keyword id="15141" type="COMPANY" weightage="20" keywordseo="Indian-Air-Force">Indian Air Force</keyword> to make the deal go through. SEE ALSO: <a href="https://www.businessinsider.in/miscellaneous/10-landmark-judgements-indias-supreme-court-passed-in-2018/slidelist/67254190.cms">10 landmark judgements India’s Supreme Court passed in 2018</a>

Agusta Westland case: India’s apex court allows taxman to try accused under new black money law

New Delhi, Jan 24 () The Income-Tax Department's searches on the Bharat Hotels group, that runs the chain of Lalit Hotels, has led to the detection of "undisclosed" foreign assets of more than Rs 1,000 crore and huge black money that the business house has "stashed" abroad, the CBDT said on Friday.
 While the policy-making body of the department did not take any names in the statement issued after the raids, official sources confirmed it to be the Bharat Hotels Group that functions under its CMD Jyotsna Suri.
 "The investigation has successfully lifted the veil, leading to detection of undisclosed foreign assets of more than Rs 1,000 crore, apart from domestic tax evasion of more than Rs 35 crore which may lead to consequences under the Black Money Act, 2015, as also, action under the I-T Act respectively," the Central Board of Direct Taxes (CBDT) said.
 "Foreign assets include investment in a hotel in UK, immovable properties in UK and UAE and deposits with foreign banks," it said.
 The CBDT said the group is a "leading member of the hospitality industry, running a hotel abroad and a chain of luxury hotels under a prominent brand name situated at various locations in India".
 "The search operation has so far resulted in seizure of unaccounted assets valued at Rs 24.93 crore that includes Rs. 71.5 lakh in cash, jewellery worth Rs 23 crore and expensive watches valued at Rs 1.2 crore," the statement said.
 The department had launched raids at 13 premises of the group, Suri and others on January 19 in and around Delhi.
 The Bharat Hotels group owns the chain of Lalit hotels in the country. It runs over a dozen such luxury facilities at present.
Jyotsna Suri has been associated with the Bharat Hotels group since 1989 and took over as the Chairperson and Managing Director (CMD) in 2006, after the death of her husband and hotelier Lalit Suri. NES NES RDM
RDM

Raids on Lalit hotels group, promoter led to Rs 1,000-cr black foreign assets: CBDT

A three-month <keyword id="45210" type="ORGANIZATION" weightage="20" keywordseo="extension">extension</keyword> in deadlines for tax payment and filing of returns notwithstanding, the Income-Tax Department has asked field formations to contact large taxpayers over phone or email to follow up on pending collections. <keyword id="331683" type="PERSON" weightage="20" keywordseo="Rakesh-Gupta">Rakesh Gupta</keyword>, Commissioner of <keyword id="47201" type="COMPANY" weightage="20" keywordseo="income">Income</keyword> Tax (Coordination &amp; Systems), Central Board of Direct Tax (CBDT), last week asked field formations to submit a daily report on follow-ups on pending tax collections from large taxpayers. While most tax officers working from home in view of the lockdown announced to check the spread of Covid-19, it is possible to continue working in today's connected world, the message to officials said. "While the ITBA (Income Tax Business Application) platform is not available to the officers for discharging statutory functions, it is still possible to follow up the pending collection matters by contacting large taxpayers telephonically/electronically," Gupta wrote. The message came within days of Finance Minister <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> announcing three months extension in the deadline for filing of income tax returns as well as payment of delayed advanced tax, self-assessment tax, regular tax, tax deducted at source, tax collected source, and securities transaction tax. The directive from CIT (C&amp;S) has not gone down well with officers with their association writing to CBDT Chairman against it. The joint body of Income Tax Employees <keyword id="22143" type="COMPANY" weightage="20" keywordseo="federation">Federation</keyword> &amp; Income Tax Gazetted Officers' Association in the letter expressed surprise at the direction "to pressurize the assesses/defaulters to pay taxes when the Finance Minister has recently announced various extensions of the statutory compliances including the extension of the last date for the (dispute resolution scheme) Vivad se Vishvash scheme and also reduced the penal interest rates." "The people's backlash in the wake of such pressures to pay taxes in the present scenario is very much evident," the convenor Ravi Shankar wrote. The association said it was not possible for assessing officers (AOs) to furnish a daily report for daily collection of current/arrear demand or applications received under the Vivad se Vishvash Scheme as the contact information of assessees/defaulters was not available at homes of the officers.Also, the officers did not have access to the ITBA platform. It asked the chairman to direct the authorities below him "to remain positive, sensitive towards the present situation, adopt a humane approach and avoid pressing the panic button within the department". The Finance Minister had on March 24 announced an extension in last for filing income tax returns for 2018-19 fiscal to June 30 as well as linking of income tax PAN with biometric ID Aadhaar by a similar three months. Also, a three-month extension in the deadline was announced for those opting for the tax dispute resolution scheme 'Vivad se Vishwas' scheme by paying the principal amount. Previously the deadline for payment of such amount was March 31 and any payment after that was to be charged with an additional 10 per cent. Now, no additional 10 per cent amount requires to be paid if payment made by June 30, 2020. Similarly, "due dates for issue of notice, intimation, notification, approval order, sanction order, filing of appeal, furnishing of return, statements, applications, reports, any other documents and time limit for completion of proceedings by the authority and any compliance by the taxpayer including investment in saving instruments or investments for rollover benefit of capital gains under Income Tax Act, Wealth Tax Act, Prohibition of Benami Property Transaction Act, Black Money Act, STT law, CTT Law, Equalization Levy law, Vivad Se Vishwas law where the time limit is expiring between March 20, 2020, to June 29, 2020, shall be extended to June 30, 2020," an official statement issued on March 24 had said. For delayed payments of advanced tax, self-assessment tax, regular tax, TDS, TCS, equalization levy, STT, CTT made between March 20, 2020 and June 30, 2020, the reduced interest rate at 9 per cent instead of 12/18 per cent per annum will be charged for this period, it had said adding no late fee/penalty would be charged for the delay. ANZ MKJ

Tax department asks officers to chase 'large dues' as they work from home

The <keyword id="6356023" type="UNKNOWN" weightage="20" keywordseo="Black-Money">Black Money</keyword> Act (the Act) had been promulgated with the intention to pursue black money stashed overseas. The Act levies tax at the rate of 30% on any undisclosed foreign income and assets held abroad by a person who is ordinarily resident in India. Additionally, the act provides for a penalty equivalent to three times the value of tax. Therefore, the total tax exposure can be as high as 120%. Further, the incumbent may be subject to imprisonment for a maximum term of 10 years. 
	 
	With a view to provide relief to the taxpayer and to encourage him/her to disclose their undeclared foreign income and assets, the Act provided for a one-time compliance window for declaration of undisclosed foreign income and assets by the taxpayer. Upon declaration, the taxpayer was liable to tax at the rate of 30% of the fair market value of the assets and a penalty of 100% of the tax, bringing the tax rate to 60% of the value of the assets. It was also clarified that the contents of the declaration will be used as evidence against the taxpayer under the Income Tax Act, 1961, the Wealth Act, 1957, or Foreign Exchange Management Act, 1999 and the value of the assets will not be chargeable to wealth tax. The time period for declaration expired on 30 September 2015. 
	 
	Black money: The current scenario 
	 
	However, the one-time relief received a tepid response and as per the government announcement, it received details of undisclosed foreign assets worth Rs3,770 crore from 638 declarants which translates into an average of INR6 crore per declarant. However the Revenue Secretary Hasmukh Adhia in a press conference on October 6, revised the figure from INR3,770 crores to INR 4147 crores. The miserly value of declaration further strengthened the belief that many of the big evaders have chosen not to avail the benefit of the compliance window. 
	 
	There are many reasons for the defeated response to this one-time opportunity. Lack of trust that the information provided may not remain confidential has been cited as the major reason for people not opting for this route. The government laid down stringent penal provisions and achieved its objective of creating fear in the minds of people, thereby acting as a deterrent for future creation of black money. But the existing evaders were also fearful that the declarations made by them may be used against them under some other law. 
	 
	Another major reason for people to back out was the possibility of a probe into interrelated transactions, with some of the people involved in a transaction willing to make a declaration, while the others may choose not to declare. Further, there also exists the possibility of routing money into India through the stock market. 
	 
	In addition to the above, many other reasons such as insufficient time provided to make the declaration, a steep tax rate of 60 per cent (including penalty) and above all a lack of clarity on the interpretation of certain provisions of the Act, have led to people not opting for the one-time option. 
	 There are numerous estimates of the amount of black money stashed abroad, ranging from 10 to 100 per cent of India's GDP. As per <keyword id="6354572" type="ORGANIZATION" weightage="20" keywordseo="CBI">CBI</keyword> estimates, Indian black money amounts to $500 billion. 
	 
	Therefore a problem this large, cannot be resolved through a single Act. An effective all round strategy is required to be formulated and struck from all directions. 
	 
	What can the Govt do? 
	 
	One of the biggest factors for creation of black money has always been high rates of taxation. The Finance Minister is his last full-budget made a commitment to bring down the corporate tax rate to 25% over the next four years. A reasonable tax rate can serve as a big incentive for people to pay tax and, thereby automatically curbing black money creation. 
	 
	Further, the government has entered into several bilateral and multi-lateral agreements with several countries for automatic exchange of information about Indian account holders in their banks. As a consequence of these agreements, banks are adopting a cautious approach while opening back accounts of Indian residents. Some are even going to the extent of seeking an undertaking/CA certificate certifying that the money proposed to be deposited is in compliance with Indian laws. 
	 
	Another constructive measure which may act as a deterrent for creation of black money is the requirement of quoting PAN for cash transactions beyond a certain threshold. 
	 
	Apart from the measures being taken by the government, some trends emerging on account of a change in life style of the urban population, such as increased use of plastic money, opening of a large number of payment gateways, internet banking and e-commerce are expected to bring about more transparency in transactions. 
	 
	Further, black money creation and corruption at various levels go hand in hand. One cannot think of curbing black money creation without curbing corruption. Therefore, the government in its effort to control foreign based and domestic black money should take effective punitive action reduce corruption and curb black money creation. 
	 
	Finally, it is only through a combination of events and actions on the part of the government and people at large, can India’s dream of achieving a black money free and prosperous economy. It is a transition in which the gestation period is expected to be very long. 
	 
	The article has been authored by Prashant Kapoor, partner, M&amp;A Tax, and Suvira Agarwal, technical director, KPMG in India. The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of the organisation.

You Searched For "Black Money Act" and got 7 results

After outrage, Govt clarifies: tax clearance certificate only for people with tax dues, high-value defaulters

PTI

Govt’s Black Money declaration drive has flopped! Only 638 declarations made amounting to just Rs 3,770 cr

BI India Bureau

Have foreign assets or income? Not disclosing it may lead to heavy penalties

Anagh Pal

Agusta Westland case: India’s apex court allows taxman to try accused under new black money law

BI India Bureau

Raids on Lalit hotels group, promoter led to Rs 1,000-cr black foreign assets: CBDT

PTI

Tax department asks officers to chase 'large dues' as they work from home

PTI

Budget 2016: Black money haunts the NaMo Govt

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