Taxmann Law Relating to Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 By Raj K. Agarwal, Rakesh Gupta Edition September 2024

Law Relating to Black Money By Raj K. Agarwal Rakesh Gupta

Law Relating to Black Money By Raj K. Agarwal Rakesh Gupta

This book thoroughly explains the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015 (Black Money Act), which addresses the issue of undisclosed foreign income and assets held by Ordinarily Residents in India. The book details the legal framework, including stringent assessment, valuation, and compliance procedures specific to the Black Money Act, distinct from the Income-tax Act, 1961.

It covers the scope and applicability of the Act, outlines severe penalties and prosecution measures for non-compliance, and provides a critical analysis of emerging legal issues due to the Black Money Act’s evolving nature.

This book is helpful for tax professionals, legal practitioners, and others to understand the complexities of undisclosed foreign assets, aiming to provide practical insights and foster an understanding of the stringent regulations designed to curb illegal asset holdings abroad.

The Present Publication is the 3^rd Edition and has been amended by the Finance (No. 2) Act, 2024. This book is authored by Dr Raj K. Agarwal & Dr Rakesh Gupta, with the following noteworthy features:

• [Purpose and Rationale] The book explains the need for a separate legal framework to address undisclosed foreign income and assets, differentiating it from the broader Income-tax Act, 1961. It outlines the stringent measures targeting individuals classified as Ordinarily Residents in India who possess undisclosed foreign income and assets and the severe penalties and prosecution provisions intended to curb such practices
• [Scope and Applicability] Detailed coverage of the Black Money Acts’ applicability to different categories of residents, including those converting from Non-Resident to Ordinarily Resident status, students studying abroad, and employees working abroad temporarily. It emphasizes the ongoing obligations of residents to declare all foreign assets in their income tax returns and the legal implications of non-compliance
• [Assessment and Valuation] The book provides an in-depth analysis of the assessment and re-assessment processes for undisclosed foreign income and assets under the Black Money Act, highlighting the absence of a time limitation for such assessments. It details how these assets must be valued at current market prices rather than historical costs, ensuring that assessments reflect their true value
• [Penalties and Prosecutions] A comprehensive analysis of the penalties and prosecution provisions, including a detailed commentary on when and how these measures can be invoked. The book addresses significant issues, such as the rationale behind the absence of time bars for assessments and the legal nuances of prosecuting non-compliance
• [Critical Legal Issues and Case Law] Given the evolving nature of the Black Money Act, the book critically analyses emerging legal issues, providing the authors’ opinions on various unresolved questions. It also reviews relevant case laws that have shaped the interpretation and enforcement of the Act, providing practical insights for legal practitioners
• [Valuation Rules] Detailed examination of the valuation rules under the Black Money Act, including guidelines for computing the fair market value of different types of undisclosed foreign assets and the importance of using current market values for assessments
• [Judicial Precedence and Evolving Interpretation] The book emphasizes the limited judicial precedence available for the Black Money Act, as it is a relatively new law. It highlights the ongoing evolution of legal interpretations and the authors’ role in providing clarity through their expert opinions
• [Continuous Amendments and Updates] The book is up-to-date with the latest amendments, including those made by the Finance (No. 2) Act, 2024, and reflects recent court decisions from the past year, ensuring readers have access to the most current legal landscape

The chapter breakdown of the book is as follows:

• Introduction
  • Overview of the Black Money Act, including its objectives, the rationale behind its enactment, and key features that distinguish it from the Income-tax Act
• Applicability & Definitions
  • Detailed clarification of key terms and the Black Money Acts’ applicability as outlined in Sections 1 and 2
• Charge, Scope & Computation
  • Comprehensive guidelines for calculating undisclosed foreign income and assets under Sections 3, 4, and 5
• Tax Authorities
  • Analysis of the roles and jurisdictions of tax authorities as per Sections 6 to 9
• Assessment Procedures
  • Detailed processes for the assessment and re-assessment of undisclosed foreign income and assets under Sections 10 to 14, including significant legal issues
• Appeal & Revision
  • Step-by-step guidance on the appeal and revision mechanisms available under the Black Money Act, covering Sections 15 to 29
• Recovery of Tax & Interest
  • A thorough understanding of the tax recovery mechanisms, including rules on interest and enforcement actions under Sections 30 to 40
• Penalties
  • In-depth examination of penalties imposed under Sections 41 to 47, including interpretations and possible defences for non-compliance
• Prosecution
  • Comprehensive coverage of prosecution measures under Sections 48 to 58, detailing conditions under which legal actions can be initiated
• Declaration Scheme
  • A guide to the declaration scheme available under Sections 59 to 72, designed to facilitate compliance for those with undisclosed foreign assets
• General Provisions & Valuation Rules
  • Analysis of the general provisions and valuation rules under Sections 73 to 88, including methodologies for valuing various asset types
• Additional Resources
  • The book includes appendices with relevant forms, CBDT circulars, notifications, and extracts from other related laws

About the author

Dr Raj K. Agarwal has been meritorious throughout his academic career. He has done M.Com, LL.B. and PhD. He is a Fellow member of the Institute of Chartered Accountants of India and Institute of Company Secretaries of India and an Associate Member of the Institute of Cost & Works Accountants of India. Having practised as Chartered Accountant for more than 25 years as a senior partner in M/s. Rakesh Raj & Associates, presently, he is practising as an advocate at Delhi High Court. He has broad experience in handling Income Tax search cases and has poured his practical experience into the form of this well-researched book. He has been associated with the academic activities of the Institute of Chartered Accountants of India, representing various committees of the Institute and with the Institute of Company Secretaries of India, representing its Northern India Regional Council as Chairman in 2003. He has contributed articles and addressed various income tax, accounting, and auditing seminars.

Dr Rakesh Gupta is a law graduate and Fellow Member of the Institute of Chartered Accountants of India and Institute of Company Secretaries of India and an Associate Member of the Institute of Cost & Works Accountants of India. He has done a PhD. He was awarded the gold medal in the LL.B. examination by the University. He and Dr Raj started practising as a chartered accountant in 1984 in the firm M/s. Rakesh Raj & Associates. He was selected as a Member of the Income Tax Appellate Tribunal in 2000. Afterwards, he resigned from the service and started practising as an advocate as a senior partner of M/s. RRA TaxIndia at Delhi representing income-tax cases before various High Courts and before the Supreme Court of India. He is a prolific speaker and has contributed to the profession by addressing various seminars regularly on legal and practical topics relating to Income Tax. He has contributed articles in various professional magazines, wrote columns in newspapers and made appearances on T.V. channels.