Union Minister Nirmala Sitharaman tabled the Finance Bill in the parliament as part of the Union Budget 2024-25, which included an amendment to the Black Money Act.
Central Board of Direct Taxes (CBDT) Chairman Ravi Agarwal stated on 25 July that the amendment in the Black Money Act would provide taxpayers relief from penalty when a situation arises if they fail to disclose overseas assets worth ₹20 lakh.
Though he mentioned the obligation to report the transaction has not been eliminated, Moneycontrol reported that, as per details, the Black Money Act amendments in Sections 42 and 43 will be part of the Finance Bill.
Currently, if taxpayers fail to disclose a foreign asset worth ₹5 lakh, they have to pay a penalty of ₹10 lakh. However, if the amendments are approved, i.e., the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the penalty or taxes on such income will be relaxed.
“At present if the taxpayer is holding any asset abroad, which is not declared in the income tax return then there is a penalty of ₹10 lakh. An amendment in the Black Money Act is proposed that If the value of the overseas asset is up to ₹20 lakh, and is not disclosed, there will be no penalty if it’s a bonafide mistake on the part of the taxpayer,” Moneycontrol quoted Agarwal as saying.
Meanwhile, the obligation to actually report a transaction has not been done away, which means the penalty has been removed while the obligations have not.
“The amendment is proposed as the income tax department presumes there may not be a malafide intention to hide it. So in such bonafide mistakes the person should not be subjected to penalty,” MC quoted the CBDT chairman as saying.