Budget 2024: Not reporting these foreign assets in ITR won’t attract the Rs 10 lakh penalty under Black Money Act
Budget 2024 proposes to remove the penalty of Rs 10 lakh under section 42 and 43 of the Black Money Act (applicable till now) if you fail to report any foreign assets (other than immovable property) where the aggregate value does not exceed Rs 20 lakh. This amendment will take effect from October 1, 2024.#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
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This exemption from penal provisions also applies to incorrect or non-reporting of these foreign assets.
“This amendment provides relief to taxpayers who may have inadvertently missed to report movable assets and the value of the asset or assets itself was less than the penalty imposed by Section 42 and 43 of the Black Money Act,” says Shalini Jain, Tax Partner, People Advisory Services, EY India.
"Indian professionals working in multinationals get ESOPs and invest in social security schemes and other movable assets abroad. Non-reporting of such small foreign assets has penal consequences under the Black Money Act. Such non-reporting of movable assets up to Rs 20 lakh is proposed to be de-penalised," said the finance minister in her Budget 2024 speech.
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More NewsWhat is the penalty specified under the Black Money Act?
According to the Memorandum to Budget 2024, Section 42 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the Black Money Act) provides for a penalty for failure to furnish details of foreign income and assets in the return of income. The said section is applicable in respect of an assessee being a resident other than not ordinarily resident in India who has failed to furnish the return of income when such assessee is having any asset, or is a beneficiary of an asset located outside India or is having any income from a source located outside India.Similarly, section 43 of the Black Money Act provides for penalty for failure to furnish in return of income, an information or furnish inaccurate particulars about an asset (including financial interest in any entity) located outside India. The said section is applicable when the assessee being a resident other than not ordinarily resident in India has failed to furnish the details of any asset located outside India, held by him as a beneficial owner or otherwise, or in respect of which he was a beneficiary, or relating to any income from a source located outside India.
What needs to be reported under the Black Money Act?
In view of the above, every resident and ordinarily resident, while filing the return of income, shall disclose all foreign assets (including investment in shares and securities) and income from such foreign assets in the Income Tax Return. Failure to furnish the ITR in relation to foreign income and assets or to report such foreign income and assets located outside India in the ITR may attract a penalty under section 42 or 43 of the Black Money Act, of an amount of ten lakh rupees regardless of the value of assets located outside India.Further, provisos to the aforementioned sections of the Black Money Act state that the provisions of these sections shall not apply in respect of an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to five hundred thousand rupees at any time during the previous year.
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This story originally appeared on: India Times - Author:Faqs of Insurances
