CONTENTS
Preface iii
About the Author vii
Chapter 1 — Introduction 1
Definitions of Black Money 1
Objectives and Features of The Black Money Act 3
Impact of black money on Indian economy 4
[1] Mass Poverty: 4
[2] Uncontrollable Inflation: 4
[3] Loss of Revenue to the State Exchequer: 4
[4] Inflated Real Estate: 4
[5] Underestimation of GDP 5
Administering Authority 5
Amount of Black money deposited in foreign banks by Indians is unknown 5
Estimates of Black Money in India by various organizations 5
Estimates of Black Money [As per Black Money Committee Report, 2012] 5
Major difference between Black Money Act and Income Tax Act, 1961 6
Chapter 2 — Evolution of Strategies to Control Black Money in India 7
Role of tax havens 8
Prevention of Money Laundering Act, 2002 8
Prohibition of Benami Property Transactions Act, 1988 9
Direct Payment into Bank Accounts of Payees 9
Unique Identity (UID)-Aadhaar 9
May 26, 2012 : The ‘White Paper on Black Money’ 10
The Union Budget, 2015 10
MoS Finance speaks extensively on measures taken by
Government under Black Money Act 11
Systemic measures by Government under Black Money Act yields
results; detects undisclosed income of several crores 12
Chapter 3 — Factors Leading to Generation of Black Money in India 14
- Generating Black Money by Manipulation of Accounts 14
(i) Out of Book Transactions 14
(ii) Parallel Books of Accounts 14
(iii) Manipulation of Books of Account 15
(iv) Manipulation of Sales/Receipts 15
(v) Under-reporting of Production 15
(vi) Manipulation of Expenses 15
(vii) Other Manipulations of Accounts 16
(viii) Manipulation by Way of International Transactions
through Associate Enterprises 16
(ix) Manipulation of Capital 16
(x) Manipulation of Closing Stock 16
(xi) Manipulation of Capital Expenses 16
- Characteristics of Tax havens 16
- Generation of Black money in Some Vulnerable Sections of
the Economy 17
(i) Land and Real Estate Transactions: 17
(ii) Bullion and Jewellery Transactions: 17
(iii) Financial Market Transactions: 17
(iv) Public Procurement: 18
(v) Non-profit Sector: 18
(vi) Informal Sector and Cash Economy: 18
(vii) External trade and Transfer Pricing: 18
Chapter 4 — Indian legislations for prevention of Black Money 19
- Black Money (Undisclosed Foreign Income and Assets or the UFIA)
and Imposition of Tax Act, 2015 19
- Prevention of Money Laundering Act, 2002 (PMLA) 19
- Foreign Exchange Management Act, 1999 (FEMA) 20
- The Prohibition of Benami Property Transactions Act, 1988 20
- Income Tax Act, 1961 21
Chapter 5 — Institutions to deal with Black Money in India 22
- Central Board of Direct Taxes [CBDT] 22
- Enforcement Directorate [ED] 22
- Financial Intelligence Unit [FIU-IND] 23
- The Central Board of Indirect Taxes & Customs (CBIC) and DRI 23
- Central Economic Intelligence Bureau[CEIB] 24
- Other Central Agencies 24
Chapter 6 — One – time Compliance Window under
Black Money Act 29
Income and assets that qualify the disclosure 29
CBDT PRESS RELEASE for compliance window under Black Money Act 30
Computation of tax on UFIA 31
Manner for Computation of total UFIA (Section 4) 31
Chapter 7 — Person on whom Black Money Act, 2015 applies 33
Applicability to Foreign Undisclosed Income and Assets 34
Beneficial Owner 34
Undisclosed Income and Assets 35
Undisclosed foreign assets 35
Undisclosed foreign income 35
Chapter 8 — Short title, Extent and Commencement 36
Short title, extent and commencement 36
Chapter 9 — Definitions 38
Memorandum to Finance (No. 2) Bill, 2019 40
Chapter 10 — Charge of Tax 42
Charge of Tax 42
Meaning of Value of Undisclosed Asset [Section 3(2)] 43
Chapter 11 — Scope of Total Undisclosed Foreign Income and Asset 44
What is total undisclosed foreign income or asset [Section 4(1)] 44
Any income already taxed in assessment or reassessment under
the Income Tax Act shall not be included in the total undisclosed
foreign assets [Section 4(2)] 45
Income which is included in the total foreign income or asset under this
Act shall not form part of the total income under Income Tax Act
[Section 4(3)] 45
Source of investment in any asset 46
In case source of investment in foreign asset is established out of
untaxed domestic income 47
In case of source of investment in foreign asset is established by
the assessee to be from the untaxed foreign income 47
Cases where source of investment in foreign asset is not out of
taxed or untaxed income but is out of capital receipts 47
Chapter 12 — Computation of Total Undisclosed
Foreign Income and Asset 48
Computation of Total UFIA and tax thereon 49
Chapter 13 — Tax Authorities 51
CBDT Circular F. No. 225/24/2021/ITA-II, Dated 23.02.2021 52
Chapter 14 — Change of incumbent 54
Change of incumbent [Section 7] 54
Chapter 15 — Powers Regarding Discovery and Production of
Evidence 55
Powers of Tax Authorities 56
Power to Impound 56
Code of Civil Procedure, 1908 56
Chapter 16 — Proceedings before Tax Authorities to be
Judicial Proceedings 57
Punishment for false evidence [Section 193 of IPC, 1860] 57
Giving or fabricating false evidence with intent to procure conviction
of offence punishable with imprisonment for life or
imprisonment [Section 195 of IPC, 1860] 58
Using evidence known to be false [Section 196 of IPC, 1860] 58
Intentional insult or interruption to public servant sitting in
judicial proceeding [Section 228 of IPC, 1860] 58
Chapter 17 — Assessment Proceedings under Black Money Act 59
Conditions to be fulfilled to taxability of undisclosed assets
under Black Money Act 61
Assessing Officer is permitted to issue notice for the assessment or
reassessment without any time limit 61
Required to issue 2 assessment orders against the single
Income Tax Return 61
Not required to file a separate return under the Black Money Act, 2015 61
Specimen of Assessing Officer’s Order under section 10(3) of the
Black Money (Undisclosed Foreign Income and Assets) and
Imposition of Tax Act, 2015 62
Absent failure in disclosure & explanation, foreign life insurance
policy not taxable under Black Money Act 63
Holds Black Money proceedings against Yashovardhan Birla jurisdictionally
defective—There cannot be simultaneous proceedings under
Black Money Act and Income-tax Act 65
NRI’s Swiss bank deposits, non-taxable sans Assessing Officer establishing
nexus with India sourced income 67
Chapter 18 — Time Limit for Completion of Assessment and
Reassessment 70
Time limit for completion of assessment and reassessment
[Section 11 of BMA, 2015] 70
Agreement with foreign countries or specified territories
[Section 90 of IT Act] 71
Adoption by Central Government of agreement between
specified associations for double taxation relief [Section 90A of IT Act] 72
Chapter 19 — Rectification of Mistake 75
Rectification of mistake [Section 12 of BMA, 2015] 75
Chapter 20 — Notice of Demand 76
Notice of demand [Section 13 of BMA, 2015] 76
Notice of demand [Rule 5] 76
APPENDIX – FORM 1 76
Chapter 21 — Direct Assessment or Recovery not Barred 78
Direct assessment or recovery not barred [Section 14 of BMA, 2015 78
Chapter 22 — Appeals to the Commissioner (Appeals) 79
Appeals to the Commissioner (Appeals) 79
Procedure to be followed in appeal 80
Powers of Commissioner (Appeals) 81
Chapter 23 — Appeals to Appellate Tribunal 87
Appeals to Appellate Tribunal [Section 253 of IT Act, 1961] 87
Chapter 24 — Appeal to High Court 90
Case before High Court to be heard by not less than two Judges 91
Chapter 25 — Appeal to Supreme Court 92
Appeal to Supreme Court 92
Hearing before Supreme Court 92
Chapter 26 — Revision of Orders Prejudicial to Revenue by
Principal Commissioner or the Commissioner 93
Revision of orders prejudicial to revenue 93
Chapter 27 — Revision of other orders by the
Principal Commissioner or the Commissioner 95
Revision of other orders 95
Chapter 28 — Tax to be Paid Pending Appeal, etc. 97
Tax to be paid pending appeal 97
Execution of order for costs awarded by Supreme Court 97
Amendment of assessment on appeal 97
Exclusion of time taken for obtaining copy 97
Filing of appeal by tax authority 97
Chapter 29 — Recovery of Tax dues by Assessing Officer 99
Recovery of tax dues by Assessing Officer 99
Chapter 30 — Recovery of Tax due by Tax Recovery Officer 101
Recovery of tax due by Tax Recovery Officer 101
Chapter 31 — Modes of recovery of Tax Dues 102
Modes of recovery of tax dues 102
Chapter 32 — Tax Recovery Officer by whom recovery of tax dues
is to be effected 105
Tax Recovery Officer by whom recovery of tax dues is to be effected 105
Chapter 33 — Recovery of Tax Dues in Case of a Company in
Liquidation 106
Recovery of tax dues in case of a company in liquidation 106
Chapter 34 — Liability of Manager of a Company 109
Liability of manager of a company 109
Chapter 35 — Joint and Several Liability of Participants 110
Joint and several liability of participants 110
Chapter 36 — Recovery through State Government 111
Recovery through State Government 111
Chapter 37 — Recovery of Tax Dues in Pursuance of Agreements
with Foreign Countries or Specified Territory 112
Recovery of tax dues in pursuance of agreements with foreign
countries or specified territory 112
Chapter 38 — Recovery by Suit or under other Law not Affected 113
Recovery by suit or under other law not affected 113
Recovery of Tax from other person than the taxpayer under
the Black Money Act, 2015 113
Recovery of tax under the Black Money Act, 2015 from the Indian assets 113
Chapter 39 — Interest Payable by Assessee 114
Interest for default in furnishing return and payment or
deferment of advance tax 114
Rules on applicability & expanse of Black Money Act, 2015; Explicates
on jurisprudence & underlying policy 114
Chapter 40 — Penalty in Relation to Undisclosed Foreign Income
and Asset 116
Penalty in relation to undisclosed foreign income and asset 116
Chapter 41 — Penalty for Failure to Furnish Return in Relation to
Foreign Income and Asset 117
Penalty for failure to furnish return in relation to foreign income and asset 117
Return of income [section 139(1) of I.T. Act, 1961] 117
Chapter 42 — Penalty for Failure to Furnish in Return of Income, an
Information or Furnish Inaccurate Particulars About an
Asset (including financial interest in any entity)
Located Outside India 121
Powers of Assessing Officer to levy penalty 121
Chapter 43 — Penalty for Default in Payment of Tax Arrear 124
Penalty for default in payment of tax arrear 124
Chapter 44 — Penalty for other defaults 125
Penalty for other defaults 125
Chapter 45 — Procedure 126
Denies stay on penalty proceedings under Black Money Act, basis Revenue’s
limitation plea 126
Chapter 46 — Bar of Limitation for Imposing Penalty 128
Bar of limitation for imposing penalty 128
Chapter 47 — Chapter not in Derogation of any other Law or
any other Provision of this Act 129
Chapter not in derogation of any other law or any other provision of this Act 129
Chapter 48 — Punishment for Failure to Furnish Return in
Relation to Foreign Income and Asset 131
Punishment for failure to furnish return in relation to foreign income
and asset 131
Chapter 49 — Punishment for Failure to Furnish in Return of Income,
any Information about an Asset (including
financial interest in any entity)
Located outside India 135
Mandatory requirement to attract the provisions of section 50 of
Black Money Act 136
No offence under section 50 of Black Money Act when foreign
assets disclosed in revised return; Quashes criminal complaint 137
Chapter 50 — Punishment for wilful Attempt to Evade Tax 141
Punishment for wilful attempt to evade tax 141
Chapter 51 — Punishment for false statement in verification 142
Punishment for false statement in verification 142
Chapter 52 — Punishment for abetment 143
Punishment for abetment 143
Chapter 53 — Presumption as to culpable mental state 144
Presumption as to culpable mental state 144
Chapter 54 — Prosecution to be at instance of principal chief
commissioner or principal director general or
chief commissioner or director general or
principal commissioner or commissioner 145
Prosecution to be at instance of Principal Chief Commissioner or
Principal Director General or Chief Commissioner or Director General
or Principal Commissioner or Commissioner 145
Chapter 55 — Offences by Companies 146
Offences by companies 146
Chapter 56 — Proof of Entries in Records or Documents 147
Proof of entries in records or documents 147
Chapter 57 — Punishment for Second and Subsequent Offences 148
No provisions for compounding 148
Chapter 58 — Tax compliance for Undisclosed Foreign Income
and Assets (one time compliance window) 149
Declaration of undisclosed foreign asset [Section 59 of BMA, 2015] 149
Charge of tax [Section 60 of BMA, 2015] 151
Penalty [Section 61 of BMA, 2015] 151
Manner of declaration [Section 62 of BMA, 2015] 151
Time for payment of tax [Section 63 of BMA, 2015] 152
Undisclosed foreign asset declared not to be included in total income
[Section 64 of BMA, 2015] 153
Undisclosed foreign asset declared not to affect finality of
completed assessments [Section 65 of BMA, 2015] 153
Tax in respect of voluntarily disclosed asset not refundable
[Section 66 of BMA, 2015] 153
Declaration not admissible in evidence against declarant
[Section 67 of BMA, 2015] 153
Declaration by misrepresentation of facts to be void
[Section 68 of BMA, 2015] 153
Exemption from wealth-tax in respect of assets specified in
declaration [Section 69 of BMA, 2015] 154
Applicability of certain provisions of Income-tax Act and of Chapter V
of Wealth-tax Act [Section 70 of BMA, 2015] 154
Chapter 59 — Chapter not to apply to Certain Persons 156
Chapter not to apply to certain persons [Section 71 of BMA, 2015] 156
Analyses of provisions of Section 71(d) of the Black Money Act 157
Chapter 60 — Removal of Doubts 159
Removal of doubts [Section 72 of BMA, 2015] 159
Chapter 61 — Treaties : Agreement with Foreign Countries
or Specified Territories 161
Agreement with foreign countries or specified territories
[Section 73 of BMA, 2015] 161
Chapter 62 — General Provisions 162
Service of notice generally [Section 74 of BMA, 2015] 162
Authentication of notices and other documents
[Section 75 of BMA, 2015] 162
Notice deemed to be valid in certain circumstances
[Section 76 of BMA, 2015] 162
Appearance by approved valuer in certain matters
[Section 77 of BMA, 2015] 163
Appearance by authorised representative
[Section 78 of BMA, 2015] 163
Rounding off of income value of asset and tax
[Section 79 of BMA, 2015] 164
Cognizance of offence [Section 80 of BMA, 2015] 164
Assessment not to be invalid on certain grounds [Section 81 of BMA, 2015] 164
Bar of suits in civil courts [Section 82 of BMA, 2015] 164
Income-tax papers to be available for purposes of this Act
[Section 83 of BMA, 2015] 165
Power to make rules [Section 85 of BMA, 2015] 165
Power to remove difficulties [Section 86 of BMA, 2015] 166
Amendment of section 2 of Act 54 of 1963 [Section 87 of BMA, 2015] 166
Amendment of Act 15 of 2003 [Section 88 of BMA, 2015] 166
Chapter 63 — Application of Provisions of Income-tax Act 167
Application of provisions of Income-tax Act [Section 84 of BMA, 2015] 167
CBDT’s Instruction on exceptions to prosecution under Black Money Act,
dated 15.03.2022] 167
Chapter 64 — Valuation of Undisclosed Assets 168
Fair market value [Rule 3 of BMA, 2015] 168
Fair Market Value (FMV) of quoted shares and securities 172
Fair Market Value (FMV) of unquoted equity shares 172
Fair Market Value (FMV) of unquoted shares and securities other
than equity shares 173
Fair Market Value (FMV) bank accounts 173
Fair Market Value (FMV) of bullion, jewellery, precious stone and
artistic work 173
Fair Market Value (FMV) of immovable property 173
Interest in partnership firm, AOP, LLP 173
Other assets 173
Chapter 65 — Beneficial Owner under Black Money Act 175
Text of FAQ No. 31 of Circular No. 13 : Question No. 31: A person is a
beneficiary in a foreign asset. Is he eligible for declaration
under section 59 of the Act? 175
Beneficial Interest [Section 89(10) of the Companies Act, 2013] 176
Beneficial owner under the Prevention of Money-laundering Act, 2002 176
Chapter 66 — Designated Special Court for Specified State 178
[1] Designated Special Courts in the State of Odisha 178
[2] Designated Special Courts in the State of Himachal Pradesh 178
[3] Designated Special Courts in the State of Chhattisgarh 179
[4] Designated Special Courts in the State of Uttarakhand 179
[5] Designated Special Courts in the State of Andhra Pradesh 180
[6] Designated Special Courts in the State of Madhya Pradesh 181
[7] Designated Special Courts in the State of Tamil Nadu 181
[8] Designated Special Courts in Delhi 182
[9] Designated Special Courts in the State of Rajasthan 182
[10] Designated Special Courts in the State of Bihar 183
[11] Designated Special Courts in the State of Uttar Pradesh 183
[12] Designated Special Courts in the State of Kerala 184
[13] Designated Special Courts in the State of Goa 185
[14] Designated Special Courts in the State of Manipur 185
[15] Designated Special Courts in the State of Karnataka 186
[16] Designated Special Courts in the State of Telangana 188
[17] Designated Special Courts in the State of Meghalaya 188
[18] Designated Special Courts in the State of Gujarat 188
[19] Designated Special Courts in the State of Assam,
Nagaland, Mizoram and Arunachal Pradesh 190
[20] Designated Special Courts in the State of Tripura 191
[21] Designated Special Courts in the State of Maharashtra 191
[22] Designated Special Courts in the Union Territory of
Chandigarh 191
[23] Designated Special Courts in Union Territory of
Jammu and Kashmir 192
Chapter 67 — Income Tax Informants Rewards Scheme, 2018 193
CBDT Letter F. No. 292/62/2012-IT (Inv.III) /26, Dated, 23.04.2018 193
INCOME TAX INFORMANTS REWARD SCHEME, 2018 193
Ready Reckoner to the Scheme 193
Chapter 68 — Important CBDT’s Circulars/Instructions/ FAQS 213
[1] CBDT’s Circular No. 15 of 2015, Dated 03.09.2015 : 213
Subject : Clarifications on Tax Compliance for Black Money
(Undisclosed Foreign Income and Assets) and
Imposition of Tax Act, 2015 213
[2] CBDT Circular No. 13 of 2015, Dated 06.07.2015 223
CBDT issues 32 FAQs on Black-money law amnesty scheme 223
CBDT Circular No. 13 of 2015, Dated 06.07.2015 224
[3] CBDT Circular No. 12 of 2015, Dated 02.07.2015: 234
Subject : Explanatory notes on provisions relating to tax compliance
for undisclosed foreign income and assets as provided in Chapter VI
of the Black Money (Undisclosed Foreign Income And Assets)
and Imposition of Tax Act, 2015 234
Chapter 69 — The Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Act, 2015 238
Chapter 70 — Black Money (Undisclosed Foreign Income and
Assets) and Imposition of Tax Rules, 2015 276
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