Black money law: Compliance window not open for those being probed now

New Delhi - The government on Friday said Indians against whom information has been received from foreign nations on overseas accounts or assets will not be eligible to use compliance window to make voluntary disclosures under the stringent new black money law. In the explanatory notes issued on the 90-day one-time compliance window provided to foreign assets holders to come clean, the Finance Ministry said the facility will not be available for those against whom the Income Tax Department has initiated proceedings before June 30 or has carried out searches. [caption id=“attachment_2286456” align=“alignleft” width=“380”]  Reuters[/caption]Also, it will not be available for persons against whom any information has been received from foreign nations on or before June 30. The Indian government has received information regarding some of its citizens having undisclosed foreign accounts in HSBC’s Geneva branch and LGT Bank Liechtenstein. In many of these cases, notices have been issued by the tax department, while prosecution has started in some. The three categories of persons barred from availing the ‘compliance window’ ending September 30 include foreign account holders like some of the ones mentioned in the HSBC list against whom the government has got information. They will not get immunity from the 120 percent tax and penalty and up to 10-year jail term prescribed in the new law. The benefit will not also accrue to those availing benefits under Double Taxation Avoidance Agreements (DTAAs) and Tax Information and Exchange Agreements (TIEA) with foreign countries and jurisdictions. The disclosures made in the 90-day compliance window would attract 30 percent tax and an equivalent amount of penalty, while escaping criminal prosecution and jail term. For the purpose of assessing the value of bank deposits and assets abroad, the Central Board of Direct Taxes (CBDT) has issued a separate guideline detailing the parameters of valuing each of them. The value in a bank account will be assessed by totalling all deposits made since opening while assets like immovable property, shares and jewellery will be valued at fair market price for levy of tax and penalty both during the compliance window and otherwise. The declaration under the compliance window would be invalid where the declaration has been made by suppression of facts or misrepresentation of information. The compliance window, the explanatory note said, will not be available in cases where “any information has been received by the competent authority under an agreement entered into by the Central Government under Section 90 or Section 90A of the Income-Tax Act in respect of such undisclosed asset” on or before June 30. The Section 90 and 90A of the Income Tax Act deals with double taxation avoidance agreements as well as information exchange on tax evasions. The compliance window also cannot be availed in cases “where a notice under section 142 or section 143(2) or section 148 or Section 153A or Section 153C of the I-T Act has been issued in respect of such assessment year and the proceeding is pending before the Assessing Officer”. The same rule would also apply in cases “where a search has been conducted under Section 132 or requisition has been made under Section 132A or a survey has been carried out under Section 133A of the I-T Act in a previous year”. It said that the declaration of foreign assets and income would be filed with the Commissioner of Income Tax, Delhi and may also be filed online on the e-filing website of the I-T department using digital signature of the declarant. PTI