Provisions Under various Black Money Laws in India

A.  Income Tax Act, 1961 (Domestic Undisclosed Income)

The IT Act has several sections targeting unexplained or concealed income and assets:

1.  Section 69 / 69A / 69B – Treats unexplained cash, investments, or assets, including shares and partnership capital, as taxable income.

2.  Section 115BBE – Taxes income from undisclosed sources at a flat 60%, no deductions allowed.

3.  Section 271 / 271AAB – Penalties for concealment of income; can go up to 300% of tax evaded.

4.  Section 50C / 50CA – Applies in case of property transactions below market value to curb tax evasion.

B.  Benami Transactions (Prohibition) Act, 1988 (Amended 2016)

Benami provisions target properties held in another person’s name to hide ownership:

1.   Section 3 – Declares benami transactions illegal.

2. Section 24 – Provides for attachment of benami property without prior notice.

3.  Section 26 – Prescribes penalties, including imprisonment up to 1 year or fines.

4.  Scope includes digital property registrations, corporate holdings, and joint ventures.

C.  Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

This Act specifically targets undisclosed offshore income and assets:

Reporting Requirement – Indian residents must declare all foreign accounts, investments, and assets.

1.  Section 3 – Charges tax on undisclosed foreign income and assets.

2.  Section 5 – Outlines computation of total undisclosed foreign assets.

3.  Penalty Provisions – Section 15(1): If an Indian resident willfully conceals foreign income or assets, a penalty of 300% of the tax payable is imposed.

4.  Enforcement Powers – Section 8: Authorities can summon, inspect, and inspect foreign holdings.

D.  Foreign Exchange Management Act (FEMA), 1999

FEMA provisions help track foreign assets and illegal cross-border transfers:

1.  Regulation of Foreign Assets – Residents must comply with reporting requirements.

2.  Penalties – Section 13: Can be up to 3 times the transaction amount, along with prosecution for non-compliance.