Black Money Law in India

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (hereinafter called ‘BMA’) enacted by the parliament to come into effect from 1.7.2015 

Person on whom BMA applies Initially, BMA was made applicable on ‘assessee’/person who were ‘resident’ in India other than ‘not ordinarily resident’ under section 6 of ITA.

Now BMA include such ‘non- resident’ and ‘not ordinarily resident’ under ITA also, who were ‘resident’ under ITA in the year to which undisclosed foreign income related and/or in which undisclosed asset located outside India was acquired.

Charge to tax on ‘undisclosed foreign income and asset’ – total ‘undisclosed foreign income and asset’ ‘- 30% tax & Penalty is 3 time of tax I.e. 90% of undisclosed amount 

‘Undisclosed foreign income and asset’ is defined under clause (12) of section 2 of BMA which, in simple terms, is the sum total of (i) the amount of undisclosed income of an assessee from a source located outside India and (ii) the value of an undisclosed asset located outside India.

Conclusion : Broadly speaking, black money under BMA is untaxed foreign-sourced income or such investment in foreign asset the source of which is not explained or explainable. There is interplay between ITA and BMA which can be discussed separately.