After passing the Constitution Amendment Bill for Goods And Services Tax (GST) in the lower House last week, the NDA government successfully pushed through the undisclosed Foreign Income and Assets Bill, 2015 to unearth black money stash overseas, in Lok Sabha.Under the proposed law, there would be a short compliance window within which people with undisclosed income abroad can come clean by paying 30% tax and 30% penalty. A time-frame will be provided as a compliance window.
However, for those who refuse to do so, the bill has provisions for rigorous punishment, including a jail term of 3-10 years. Besides, failure to meet the compliance timeline will attract an additional penalty of 90% for a total tax liability of 120% on the quantum of black money abroad. Reports suggest that there could be a two-month window to declare overseas assets and income and a six-month period to pay tax and penalty.
Once passed, the law would help the government in bringing black money in the declared economy, improving tax collections and eventually facilitating lowering of tax rates. Further, in a bid to ensure its easier and swifter clearance in the Rajya Sabha, the government has decided to keep the Bill outside the Income Tax (IT) Act and is treating it as Money Bill.