SME Times News Bureau | 04 Jul, 2015
The finance ministry on Friday notified rules for
calculating income and assets abroad under the Undisclosed Foreign Income and
Assets Bill.
The bill providing for heavy penalties for stashing away black money in foreign
accounts came into force earlier this week.
"These rules may be called the Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Rules, 2015," the Central Board of Direct
Taxes (CBDT) said in a notification here.
The value of the overseas assets, including immovable property, jewellery and
precious stones, archaeological collections and paintings, shares and
securities and shares in unlisted firms abroad will be calculated at the fair
market value, the CBDT said.
The value of an overseas bank account will be the sum of all deposits made in
the account since its opening, the notification said.
The fair market value of an immovable property will be higher from the
acquisition cost or the price that the property shall fetch in open market on
the date of valuation.
As per the rules, for shares and securities of listed entities, the fair market
value will be the higher of the cost of acquisition or average of the lowest
and highest price on the date of valuation.
The Black Money Act for the first time allows levy of tax in India on assets
kept abroad.
Unlawful, undisclosed income abroad has been taxed under this law at a rate of
30 percent with an additional 30 percent penalty on it.
The law provides a compliance window for declaring and paying penalty. Failure
to meet the compliance timeline will attract an additional penalty of 90
percent for a total tax liability of 120 percent on the quantum of black money
abroad.
The rules notified provide for the way foreign income and assets would be
valued for calculation of tax and penalty both for the compliance period and
beyond its expiry.
The ministry on Wednesday had notified September 30 as the expiry date of the
compliance window, while allowing those with undisclosed income and assets
abroad time till December 31 to pay the levies.
"Hence, while people will have three months to declare their undeclared
assets starting today (Wednesday), they will have another three months to pay
the penalties and taxes on the said assets," a finance ministry press
release said here.
Admitting that there was no official estimation of black money within India or
stashed away abroad, Finance Minister Arun Jaitley told parliament during its
recent budget session that the government was examining the reports of three
institutes on the matter.
An unofficial estimate of illegal money stashed away overseas puts it somewhere
between $466 billion and $1.4 trillion.