Black Money Act – Few Important Provision


Black Money Act – Few Important Provision

Let us have a look at some of the important provision which is often raised by various persons:

  1. Is Black Money Law applicable to Non Residents?

If a person is not ordinary resident but was a resident under income tax act in the year in which such undisclosed foreign income relate or undisclosed asset was acquired then such person will be falling under the definition of assessee  under black money act.

  1. Will assesee get deduction  in respect of expenditure incurred to earn such foreign income?

Section 5 deal with the computation of total undisclosed foreign income and foreign assets. Therefore in computing the total undisclosed foreign income and assets of the assessee, no deduction in respect of any expenditure or allowance or set off of any loss shall be allowed to the assessee under black money act.

  1. If Assesee having one or more foreign bank account having an aggregate balance less then five lacs is liable for penality under black money act ?

If value of all bank account are less then 5Lakhs then no penalty will be levied under black money act, but importantly, the value of bank account is calculated by adding all the deposits made in account with the bank since date of opening of account.

  1. Is there any time bar on issue of notice under the Black Money Act?

As per Sec 3, an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. Thus notice under Benami Act could be issued any time without any time limit.

  1. What is the financial penalty and imprisonment for violation?

Financial penalty is upto 300% of the tax evaded and imprisonment for wilful evasion is upto 10 years.