In a bid to assuage apprehensions regarding the one-time compliance window under the new Black Money Act, the government on Thursday reiterated that total confidentiality of information declared will be maintained even as it relaxed conditions for those who can’t get bank statements for their foreign account by saying that it will accept their “best estimate declaration”.
The clarifications are a part of the second set of frequently asked questions (FAQs) released by the Central Board of Direct Taxes (CBDT) on the compliance opportunity that ends on September 30. The CBDT said that it will accept the “best estimate” declarations by those who can’t get bank statements of their foreign accounts. 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. It also cautioned 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.
The I-T department also provided a detailed methodology for valuing of foreign properties, shares and other assets.
It also detailed treatment of income of non-residents after moving back to the country and as well as applicability of Double Taxation Avoidance Agreement (DTAA) provisions. For non-residents who receive pension for employment in a foreign country, the FAQs said the accretions to such accounts after he became a resident will have to be disclosed as it will be taxable in India.
Earlier in July the department had issued 32 FAQs on the compliance window under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act which provides for tax and penalty of 120 per cent and jail term of up to 10 years for holding undisclosed foreign assets.
The FAQ said that for joint foreign bank accounts, all the account holders will have to made independent declarations if all have made independent contribution to the account. However, if the contribution is made by just one account holder, declaration will have to be made by only the person. For foreign assets acquired during the pendency of an income tax assessment, the FAQs said, the stringent black money provisions will apply unless the assessing officer is aware of the investments made.