New black money law may apply to NRIs and their families' concealed income

First Impressions

The proposed black money law aimed at cracking down on concealed income will not just apply to Indians. Expatriates and their families will need to pay close heed to observing its conditions if they're not to fall afoul of the legislation, which stipulates exemplary punishment.

K.V. Karthik, Senior Director, Deloitte in India sheds light on the proposed law.

The Undisclosed Foreign Income and Assets (imposition of tax) Bill will apply to all persons resident in India (other than not ordinarily resident in India as per section 6 of the income tax act) and provisions of the Act will apply to both undisclosed foreign income and assets (including financial interest in any entity) for which the assessee has no explanation about the source of investment in such asset or the explanation provided is unsatisfactory. The above provisions will also apply to beneficial owners or beneficiaries of such foreign assets, thereby blocking the loophole of holding assets in the name of shell companies. With indications that the government is likely to join the Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Financial Account Information (AEOI), implementation of the FATCA, and proposed amendments to the PMLA making the offence of tax evasion a scheduled offence; the efforts to identify funds stashed abroad will receive a considerable fillip.

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