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STEPS TO BE TAKEN IN THE FINANCE BILL 2015 TO CURB BLACK MONEY AND ASSETS STORED AWAY ABROAD UNDER FEMA AND ALLIED ACTS

EXTRACT OF THE FINANCE MINISTER SPEECH :

  • Concealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with punishment of rigorous imprisonment upto 10 years. Further, · this offence will be made non-compoundable; · the offenders will not be permitted to approach the Settlement Commission; and· penalty for such concealment of income and assets at the rate of 300% of tax shall be levied.
  •  Non filing of return or filing of return with inadequate disclosure of foreign assets will be liable for prosecution with punishment of rigorous imprisonment up to 7 years.
  • Income in relation to any undisclosed foreign asset or undisclosed income from any foreign asset will be taxable at the maximum marginal rate. Exemptions or deductions which may otherwise be applicable in such cases, shall not be allowed.
  • Beneficial owner or beneficiary of foreign assets will be mandatorily required to file return, even if there is no taxable income.
  • Abettors of the above offences, whether individuals, entities, banks or financial institutions will be liable for prosecution and penalty.
  • Date of Opening of foreign account would be mandatorily required to be specified by the assessee in the return of income.
  • The offence of concealment of income or evasion of tax in relation to a foreign asset will be made a predicate offence under the Prevention of Money-laundering Act, 2002 (PMLA). This provision would enable the enforcement agencies to attach and confiscate unaccounted assets held abroad and launch prosecution against persons indulging in laundering of black money.
  • The definition of ‘proceeds of crime’ under PMLA is being amended to enable attachment and confiscation of equiva lent asset in India where the asset located abroad cannot be forfeited.
  • The Foreign Exchange Management Act, 1999 (FEMA) is also being amended to the effect that if any foreign exchange, foreign security or any immovable property situated outside India is held in contravention of the provisions of this Act, then action may be taken for seizure and eventual confiscation of assets of equivalent value situated in India. These contraventions are also being made liable for levy of penalty and prosecution with punishment of imprisonment up to five years.