26 April 2015

Bill related to regulation and #taxation of undisclosed foreign income introduced

The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 was introduced in the Lok Sabha on March 20, 2015, by the Finance Minister, Mr. Arun Jaitley. 6 The Bill will apply to Indian citizens and seeks to replace the Income Tax Act, 1961 for the taxation of foreign income. It penalizes the concealment of income, and provides for criminal liability for attempting to evade tax in relation to foreign income. Key provisions of the Bill include: 
 Tax rate: A flat rate of 30 per cent tax would apply to undisclosed foreign income or assets. No exemption, deduction or set off of any carried forward losses (as provided under the Income Tax Act, 1961) would apply. 
 One - time compliance opportunity: A one-time compliance opportunity to persons who have any undisclosed foreign assets will be provided for a limited period. Such persons would be permitted to file a declaration before a tax authority, and pay a penalty.
  Prosecution and penalty for offences: - Willful tax evasion: The punishment for willful attempt to evade tax in relation to foreign income or assets would be rigorous imprisonment from three to 10 years, and a fine. The penalty for nondisclosure of income would be equal to three times the amount of tax payable, in addition to tax payable at 30%. - Failure to furnish returns: If a person fails to furnish a return in respect of foreign assets or income, he would be liable for rigorous imprisonment of six months to seven years. Further, a penalty of Rs 10 lakh would apply. This would also apply to cases where the person has filed a return of income, but not disclosed his foreign assets.

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