I-T dept issues notice to Anil Ambani for holding funds worth Rs 814 cr in two Swiss bank accounts

I-T dept issues notice to Anil Ambani for holding funds worth Rs 814 cr in two Swiss bank accounts

Subject :Economy

Section: Fiscal Policy

Context:

The income tax department has sought to prosecute Reliance Group Chairman Anil Ambani under the Black Money Act for allegedly evading Rs 420 crore in taxes on undisclosed funds worth more than Rs 814 crore held in two Swiss bank accounts.

• The department has charged Ambani, 63, with “wilful” evasion, saying he “intentionally” did not disclose his foreign bank account details and financial interests to Indian tax authorities.
• The department said he was liable to be prosecuted under Sections 50 and 51 of the Black Money (undisclosed foreign income and assets) Imposition of Tax Act of 2015 that stipulates a maximum punishment of 10 years imprisonment with a fine.

Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

• ‘Undisclosed foreign income and asset’ is defined as the total amount of undisclosed income of an assesses from a source located outside India and the value of an undisclosed asset located outside India.
• It penalises the concealment of foreign income and provides for criminal liability for attempting to evade tax in relation to foreign income.
• The Act gave a one-time opportunity to Indian residents to declare undisclosed foreign income and assets.
• The concerned person had to pay tax at the rate of 30% and an equal amount by way of penalty if found having undisclosed overseas wealth.
• However, in case of non-declaration, the provisions included slapping of tax at the rate of 30% along with a penalty equal to three times the amount of tax evaded or 90% of the undisclosed income or the value of the asset.
• The Act provides for punishment of jail for 3-10 years for the willful evasion.
• The total undisclosed foreign income and asset of an individual would include:

(i) income, from a source located outside India, which has not been disclosed in the tax returns filed;

(ii) income, from a source outside India, for which no tax returns have been filed; and

(iii) value of an undisclosed asset, located outside India.

• Administering authority-The Central Board of Direct Taxes and the existing hierarchy of tax authorities under the provisions of the Income Tax Act, including the appeals machinery prescribed thereunder, have been tasked with implementation of the new legislation
• The Act will be applicable to a person:

(i) who is a tax resident of India as per the tests of the Income Tax Act, 1961 (ITA);

(ii) who is not a person who is a ‘resident but not ordinarily resident’; and

(iii) by whom tax is payable under the UFIA Bill on undisclosed foreign income and assets or any other sum of money.

Black economy :https://optimizeias.com/black-money/