New Delhi:(IANS) In a second set of clarifications in the frequently asked questions (FAQs) format, the government on Thursday reiterated total confidentiality of information furnished to unearth black money stashed abroad.
The finance minstry also relaxed conditions for those who cannot get bank statements of their foreign accounts, saying it would accept their “best estimate” declarations with a rider that a penalty would follow if disclosures were incomplete.
In the 27 FAQs, following those issued in July, on voluntary disclosures to be made in the 90-day compliance window ending September 30, the ministry said the new law on black money incorporates the provisions of section 138 of the Income Tax Act relating to disclosure of information in respect of assesses.
“The information in respect of declaration made is confidential as in the case of the return of income filed by the assessees,” it said.
Regarding periods for which bank statements of foreign accounts were unavailable, the FAQ said, “the person may compute the value of such period on best estimate basis” but the account holder, however, will have to furnish a certificate of the bank or any other evidence to the effect that the details are not available.
The government, however, said that if it was found later that the value of bank account was different from what had been declared, the immunity from higher penalties and jail term will only be to the extent of the declaration made.
For NRIs who receive pension for the period of employment in foreign country, the FAQs said the accretions to such accounts after they became residents will have to be disclosed and it will be chargeable to tax in India.
The income tax department in earlier released a list of FAQs, had also said disclosures made under the said act would have “immunity from prosecution under the Foreign Exchange Management Act (FEMA), Prevention of Money Laundering Act (PMLA), Income Tax Act, Wealth Tax Act, Companies Act and Customs Act”.
It, however, does not provide immunity from prosecution under any other statute.
The offence of wilful attempt to evade tax will also not be an offence under the PMLA, the FAQs said.
The one-time 90-day compliance window granted to foreign asset holders to make a declaration, however, does not guarantee immunity for wealth generated from corruption, it added.
Unlawful, undisclosed income abroad has been taxed under this law at the rate of 30 percent with an additional 30 percent penalty.
The law provides for a compliance window for declaring and paying penalty. Failure to meet the compliance timeline will attract an additional penalty of 90 percent for a total tax liability of 120 percent on the quantum of black money stashed abroad.
An unofficial estimate of illegal money stashed overseas puts it somewhere between $466 billion and $1.4 trillion.