Last week, the CBDT issued a circular explaining, in brief, a one-time compliance scheme and prescribed the procedure for filing declaration and related aspects and notified The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015 (Rules) prescribing the valuation norms for various assets, as also prescribed forms for procedural matters. Various issues and concerns were raised about the scope of the one-time compliance window under the Act. Various representations were made requesting the CBDT to clarify the scope and implications of such a declaration. Through the Circular No. 13 of 2015, the CBDT seeks to clarify, in the form of 32 questions and answers, various issues in relation to the scope of the one-time compliance window scheme (Scheme). The clarifications deal with issues, such as who qualifies for disclosure, which assets may get covered by the disclosure, basis and quantum of value of such disclosure, immunity available in respect of disclosed amount etc. The Circular also deals with concerns about the scope of immunity from prosecution under other laws, as also the impact of failure to make disclosures as part of regular income tax returns. The Circular addresses many concerns of taxpayers and provides useful guidance in the matter of the Scheme. Clarifications, to the effect that assets acquired out of exempt or non-taxable income or explained sources (particularly for expatriates and non-residents) are not undisclosed assets within the scope of the Act, allay apprehensions which had arisen on a literal interpretation of the Act. Also, the clarification that a one-time declaration can be made by anyone who was resident when unexplained overseas investment was made, clarifies the scope of coverage of the eligible declarant. The clarification about the grant of cost step-up for assets covered by the declaration and avoiding duplicate assessment of the declared amount is also welcome. Furthermore, the Circular also clarifies that, where a declaration of an undisclosed asset has been duly made under the Scheme, the Prevention of Money Laundering Act will not apply in respect of the scheduled offence viz., of wilful attempt to evade tax under the Act.
The Scheme comes with a limited time frame viz., up to 30 September 2015 and may, therefore, merit an immediate attention by the concerned persons.
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