New Delhi, July 3 (IANS) The finance ministry on Friday notified rules for calculating income and assets abroad under the Undisclosed Foreign Income and Assets Bill.
The bill providing for heavy penalties for stashing away black money in foreign accounts came into force earlier this week.
“These rules may be called the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015,” the Central Board of Direct Taxes (CBDT) said in a notification here.
The value of the overseas assets, including immovable property, jewellery and precious stones, archaeological collections and paintings, shares and securities and shares in unlisted firms abroad will be calculated at the fair market value, the CBDT said.
The value of an overseas bank account will be the sum of all deposits made in the account since its opening, the notification said.
The fair market value of an immovable property will be higher from the acquisition cost or the price that the property shall fetch in open market on the date of valuation.
As per the rules, for shares and securities of listed entities, the fair market value will be the higher of the cost of acquisition or average of the lowest and highest price on the date of valuation.
The Black Money Act for the first time allows levy of tax in India on assets kept abroad.
Unlawful, undisclosed income abroad has been taxed under this law at a rate of 30 percent with an additional 30 percent penalty on it.
The law provides a compliance window for declaring and paying penalty. Failure to meet the compliance timeline will attract an additional penalty of 90 percent for a total tax liability of 120 percent on the quantum of black money abroad.
The rules notified provide for the way foreign income and assets would be valued for calculation of tax and penalty both for the compliance period and beyond its expiry.
The ministry on Wednesday had notified September 30 as the expiry date of the compliance window, while allowing those with undisclosed income and assets abroad time till December 31 to pay the levies.
“Hence, while people will have three months to declare their undeclared assets starting today (Wednesday), they will have another three months to pay the penalties and taxes on the said assets,” a finance ministry press release said here.
Admitting that there was no official estimation of black money within India or stashed away abroad, Finance Minister Arun Jaitley told parliament during its recent budget session that the government was examining the reports of three institutes on the matter.
An unofficial estimate of illegal money stashed away overseas puts it somewhere between $466 billion and $1.4 trillion.