Tax and penalty to be levied on undisclosed foreign assets under new law
Persons having undisclosed assets abroad must declare them in a prescribed format in rupee terms within 90 days.
Undisclosed overseas assets like immovable property, jewellery, bullion, shares and artworks will be valued at the current market price for calculating tax and penalty under the new black money law.
However, in cases where the current market price turns out to be lower than the acquisition price, the higher price paid at the time of purchase of the asset will be taken into consideration for computing tax and penalty.
The income tax (I-T) department on Friday notified the rules for valuation of undisclosed overseas assets held by Indian nationals under the new law, which came into effect from July 1.
According to the rules notified by the Central Board of Direct Taxes (CBDT), persons having undisclosed assets abroad will have to declare them in a prescribed format in rupee terms during the 90-day compliance window.
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, provides for a combined tax and penalty of 120 per cent on the income or assets held abroad after the three-month window expires. The rules stated that foreign income and assets would be valued for calculation of tax and penalty both for the compliance period and beyond its expiry.
The same principle would also be applicable for valuing bullion, jewellery, precious stone, drawings, paintings, archaeological collections, and sculptures or artworks.
Along with the rules, the CBDT has appended seven forms, including those which have to be filled by persons while declaring overseas undisclosed assets. Those holding the assets will have to disclose them regarding their location, fair market value and date of acquisition.
With regard to jewellery, the rules said that disclosures have to be made about the purity, quantum and value of gold, diamond and other precious metals. Further, the Reserve Bank of India’s (RBI) reference rate on the date of valuation should be used for converting the value of foreign assets and income into rupee.
Where the fair market value of an asset is determined in a currency other than one of the permitted currencies designated by the RBI, they should be converted into dollars on the date of valuation as per the rate specified by the Central bank of that country. Thereafter, the value in dollars would be converted into rupees.
Source:- http://indiatoday.intoday. in/story/tax-penaltyi-t-department-undisclosed-foreign-assets-immovable-property-jewellery-bullion-shares/1/449090. html