Already facing a government intimation to declare your assets parked abroad then do not feel lucky with the new compliance window law! This is what the Income-Tax department clarified in the detailed frequently asked questions, notified by the finance ministry on Monday.
The set of 32 questions said that the government will give immunity to those filing the declaration from prosecution under Foreign Exchange Management Act (Fema), Prevention of Money Laundering Act (PMLA) and four other laws and at the same time added that it doesn’t give guaranteed immunity for wealth generated from corruption.
For example, the notification said that if the undisclosed asset has been acquired out of the proceeds of sale of protected animals, the person will not be eligible for immunity under the Wildlife (Protection) Act, 1972.
For those who have already received intimation from the government for making disclosures will be treated as per the Income Tax Act and as per the compliance window law. Your declaration may even get rejected after September 30. These cases will be intimated only by October 31, a month after the 90-day compliance window expires.
With regard to applicability of the capital gains tax on foreign assets declared by assessee, the ministry said that “The declarant will be liable for capital gains under the I-T Act on sale of such asset in future”.
On taxation of money in foreign bank account, it said the fair market value is the sum of all the deposits made in the account computed in accordance with the rules. “Therefore, tax and penalty needs to be paid on such fair market value and not on the balance as on date,” it added.
As regards inherited house property overseas, the FAQ said “the declaration has to be made by the person who inherited the property in the capacity of legal representative. The fair market value of the property in his case shall be higher of its cost of acquisition and the sale price.”
In case of a company declaring undisclosed assets, the directors will not be liable for any offence under the I-T Act, Wealth Tax Act, Fema, Companies Act and Customs Act.