Overview of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 The Black Money Act [‘the BMA’]

The Indian Government has enacted the Black Money Act, 2015 i.e. the BMA. The Black Money Bill has received the assent of the President on the 26^th May 2015.

The BMA is to make provisions to deal with the problems of the Black Money i.e. undisclosed foreign income and assets, the procedure for dealing with such income and assets and to provide to imposition of tax on any undisclosed foreign income and asset held outside India and for matters connected therewith or incidental thereto.

Extending to whole of India [including J&K], the BMA comes into effect from 1^st July 2015 and is applicable for assessment year [‘AY’] 2016-17 relevant to the financial year 2015-16. The BMA has 7 chapters, 88 sections, 12 Rules and 7 forms.

Report Of The Expert Committee On General Anti Avoidance Rules (GAAR)

The Government had constituted an Expert Committee on General Anti Avoidance Rules (GAAR) to undertake stakeholder consultations and finalise the GAAR guidelines as well as a roadmap for implementation. The Committee, chaired by Dr. Parthasarathi Shome, has submitted its draft report after analysis of the GAAR provisions and noting the concerns expressed by various shareholders. The draft report has recommended certain amendments in the Income-tax Act, 1961; guidelines to be prescribed under the Income-tax Rules, 1962; circular to clarify GAAR provisions along with illustrations; and other measures to improve tax administration specifically oriented towards GAAR matters.

CBDT’s Report On Measures To Tackle Black Money In India & Abroad

The Ministry of Finance has released a comprehensive report issued by a Committee headed by the Chairman, CBDT, titled “Measures to Tackle Black Money in India and Abroad” 

“Tax Avoidance Scheme”: Aus Tax Office Explains Law

The Australian Tax Office has issued a comprehensive guide explaining what constitutes a tax avoidance scheme. It is pointed out that a tax planning arrangement that goes beyond the policy intent of the law and involve deliberate approaches to exploit the tax system is a tax avoidance scheme. It is emphasized that these schemes are not limited to the ‘too good to be true’ type of arrangement but can be more sophisticated than many people realise. It is cautioned that because some tax schemes are very cleverly dressed up as seemingly legitimate arrangements, it’s important to be able to recognise them. Examples are given of typical “tax avoidance schemes” which fall foul of the law.

The guide is of immense practical importance in the Indian context especially in the light of the Draft General Anti-Avoidance Rules (GAAR) Guidelines which were introduced recently.

Comptroller of Income Tax v AZP (Singapore High Court)

Information cannot be disclosed u/A 28 of DTAA in absence of strong connection between requested information & India’s tax laws

The Indian tax authority seized documents from an Indian national which were believed to indicate the existence of undeclared income deposited in a company’s bank accounts in Singapore. Pursuant to Article 28 (1) of the India-Singapore DTAA, the Indian tax authority sent a request for information to its Singapore counterpart (the Comptroller of Income-tax). In support of the request, the Indian tax authority relied on unsigned transfer instructions allegedly issued by the Indian national as evidence that the Indian national remitted monies to the Singapore Company’s bank accounts. The Comptroller filed an application in the High Court u/s 105J of the Singapore Income-tax Act for an order requiring the bank to produce the company’s bank records. HELD dismissing the application:

Amnesty Scheme-Federal Board of Revenue-Pakistan

Notification for Amnesty Scheme issued by Government of Pakistan Revenue Division

White Paper on Black Money-(Hindi Version)

White paper on Black Money presented by Sri Pranab Mukherjee, Minister of Finance – Hindi Version