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Disclosures may be linked to returns seen on black funds

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In the second round of clarifications on the unaccounted money law next week, the government is likely to ask those holding such funds to make disclosures based on their income expectations from foreign bank accounts more than 10 years old, in case of unavailability of records.
This will be part of about two dozen frequently asked questions ( FAQs) the Department of Revenue will issue on the Undisclosed Foreign Income and Assets Act, popularly known as the black money Act, as well as on a three- month compliance window under the law.
“We are almost ready with the second set of FAQs and will be releasing that within the next four- five days. We were delayed, as we will be addressing more queries that came up based on an interaction session in Mumbai on Wednesday,” said a government official.
Many people have enquired about the unavailability of old records with the foreign banks. On this, the official said, “ On the unavailability of old information, we cannot do anything much on that. We will be asking people to make disclosures based on the expectation of income in case of unavailability of records older than 10 years… Based on the extent of their disclosures, they will be given relief.” On whether income will be considered undisclosed if tax liability was outside India, the tax department will likely clarify that such income will not be considered undisclosed.
Another issue to be clarified is that regarding the place of effective management.
The government will clarify if the president or chief executive of the company concerned is in India and whether the Act will apply to that person or not.
Even as there is only a month left for the compliance window to shut, just one disclosure of Rs.70- 80 crore has been made so far. The government expects disclosures regarding unaccounted foreign money to rise with the release of the FAQs. The three- month window closes on September 30.
Business Standard, New Delhi, 28th August 2015

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