Black money: People wishing to come clean via compliance window can dip into overseas a/cs

NEW DELHI: People wishing to come clean on undeclared foreign assets will have more flexibility to pay the 60 per cent tax. They can now dip into overseas accounts and use income from the newly declared assets to pay tax. The government, which wants to make it easier for taxpayers to use the compliance window available under the black money law, is also likely to specify that all of the declared foreign funds need not be brought back.

"Tax and penalty can be paid through funds in overseas accounts," said a finance ministry official. Those having assets besides bank accounts can dispose of them and make the payment before December 31, the official added.

The Central Board of Direct Taxes (CBDT) has received queries on whether tax payments under the one-time compliance window could be made from overseas accounts. Consequently, CBDT has written to the department of financial services about fast-tracking of fund transfers in such cases, the official told ET. Normally fund transfers from overseas do not take more than a week but the board wants to ensure there are no delays.

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, part of the Narendra Modi government’s crackdown on black money, gives a last chance to people with overseas overseas assets to declare them under a compliance window that closes September 30.



After the assets have been declared, their owners can pay a 30 per cent tax and a 30 per cent penalty (thus a total tax of 60%) and avoid prosecution. The tax and the penalty have to be paid by December 31. Tax authorities have been approached by many individuals keen to make use of the window under the new black money law, said the officials cited. CBDT will soon come out with a new challan form to facilitate these payments under the new law, which would be accounted for under the heading of black money, classified as a tax.