Black money disclosures add up to 638 accounts and Rs3,770 cr deposits as deadline ends

The government has received 638 declarations declaring undisclosed foreign assets amounting to Rs3,770 crore under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The money declared is far lower than what Prime Minister Narendra Modi had announced during his Independence Day speech in August.  The figures, however, are subject to final reconciliation.

"We have given some grace period for declaring undisclosed income and today I can say that people have come forward and declared income amounting to Rs6,500 crore," he had said.

The officer designated to receive the declarations worked till midnight of 30 September 2015 and e-filing portal was also open till midnight to receive the declarations, a government release stated.

The compliance window opened on 1 July 2015 and closed on 30 September 2015.

Tax at the rate of 30 per cent and penalty at the rate of 30 per cent will be required to be paid by 31 December 2015.

Those who have come clean can escape prosecution or jail by paying tax and penalties of around 60 per cent.

After the deadline, the tax and penalty doubles to 120 per cent and the tax evader can face up to 10 years in jail.

The government had hoped that enabling tax evaders to declare their illegal wealth and pay a softer penalty would help recover crores in black money - a major promise of PM Modi's election campaign last year.

Modi had said that Rs150,000 could be given to every citizen if illegal wealth was brought back from foreign accounts.

While there is no official estimate of the amount of money illegally deposited abroad, Washington-based think-tank Global Financial Integrity has estimated that the outflows were around $344 billion or Rs2,250,000 crore between 2002 and 2011.

India has worked with countries including Switzerland to obtain information about unaccounted money.

The French government had, in 2010, given a list of 628 bank accounts allegedly held by Indians at HSBC's Geneva branch. The government has so far initiated action in 121 cases.

The 90-day compliance window is a part of a new Black Money law that also sets up a team of regulators and ex-judges to identify those who have secret accounts abroad.

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Act) has been enacted to deal with the menace of black money stashed abroad.

The Act also provided for a compliance window for a limited period to persons who have undisclosed foreign assets, which they had not disclosed for Income-tax payments so far.

The issue of extension of the last date for e-filing returns of income and audit reports under section 44AB due by 30 September 2015 has been the subject matter of litigation in various high courts across the country. While some high courts have ruled in favour of the extension of due date, some others have ruled otherwise. 

In order to avoid discrimination between taxpayers residing in different jurisdictions and to be fair to all, and also in view of paucity of time to approach the Supreme Court by way of special leave petition (SLP), the government has decided that across the country, all the returns of income and audit reports under section 44AB, which were due for e-filing by 30 September 2015, may now be filed by 31 October 2015.

The Central Board of Direct taxes (CBDT) has issued necessary orders under section 119 of the Income-tax Act, 1961 in this regard.