Govt woos NRIs, companies and individuals to come clean on black money before compliance window expires

Just a month to go before the deadline for the three-month long black money compliance window expires on September 30, the government is making an all-out effort to woo individuals, non-resident Indians (NRIs) and companies to come clean by reporting black money. Amid growing concerns over foreign income disclosures and potential legal proceedings, the government is organizing one more workshop in Mumbai on August 26.

Despite the government's clarifications on issues raised by people keen on availing the one-time opportunity, several other issues still persist, according to chartered accountants advising clients.

While the deadline for declaring wealth or assets abroad will end on September 30, several people do not seem encouraged. They all hope that the government would take a realistic stand on the issues raised by them.

On behalf of assessees, the apex body of accountants professionals, the Institute of Chartered Accountants of India (ICAI) is all set to submit a presentation to the finance ministry.

Manoj Fadnis, president of ICAI, told dna, "We have sought certain changes from the finance ministry in the declaration form. There are several points in the disclosure that are not practical in nature. We are taking opinion from all our respective members on the respective annexures and issues raised by many people."

"We will submit our representation to the ministry just after the second workshop, which is scheduled for August 26," he said.

According to sources, ICAI in its representation will raise the biggest concern that if the declaration made within the compliance window could be used to try assessees under the Prevention of Money Laundering Act (PMLA).
Further, those who have accounts for more than 25-30 years are not being able to fill 'account opening date' and 'sum totals of credit' in the annexure of form 6.

"People do not keep a record of bank passbooks for that long a period. Banks may also not provide details for such a long-ago period," said a chartered accountant.

Sources said that they have been asked to attach valuation report estimated by valuer on valuation date in the column of immovable property. "Availability of records of such old assets are something next to impossible."

The assurance of confidentiality is also a major worry. "It's not clear yet that this is the full and final declaration and if they would face any other trials in the future."

In the recent past, the finance ministry had tried to clarify queries through FAQs.

In the first set of frequently asked questions (FAQs) which was released on July 6, the CBDT had answered 32 questions on various aspects of the black money law. The second set of FAQs, which is expected anytime now, will comprise 25-30 questions.

"The FAQs are not enough to push people to come clean. They need more clarity and moreover the assurance on further trials and scrutiny," said a tax expert on the condition of anonymity.

According to the income-tax officials, the department has received queries with regard to disclosures of bank accounts, as people are saying that they are not able to furnish details of their foreign bank accounts since their opening.

"Further clarity would be provided on the queries we have received following stakeholder consultation as well as through e-mails and letters."

According to tax authorities, people will have time till December 31 to pay the tax and penalty, if they want to come clean. Otherwise, there is a 120% penalty, plus taxes, and a jail term, for undeclared wealth or assets abroad after the three-month compliance window ends.

During the window, the penalty and taxes combined will be 60% of the value of assets declared, with no jail term, and immunity from certain laws under section 59 of (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The government is however confident on the success of the disclosure window. Prime minister Narendra Modi in his Independence Day speech had said that Rs 6,500 crore of unaccounted overseas wealth has already been disclosed by persons having unaccounted assets abroad.