The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (Act 22 of 2015) is an Act of the Parliament of India designed to curb the problem of undisclosed foreign income and assets, commonly referred to as black money stashed abroad. The Act was introduced in the Parliament on March 20, 2015, received the President's assent on May 26, 2015, and came into effect from July 1, 2015, with the tax charge applicable from the assessment year commencing on or after April 1, 2016. Its origin lies in the long-standing challenge for Indian tax authorities to address unreported offshore wealth and deter tax evasion by creating a separate, stringent framework.
The Act applies to all persons resident in India and creates a separate regime for taxing undisclosed foreign income and assets, distinct from the Income-tax Act, 1961. The core mechanism is the imposition of a flat tax rate of 30 per cent on the total undisclosed foreign income and asset, as stipulated in Section 3. Crucially, no exemption, deduction, or set-off of carried forward losses is allowed against this income. The Act imposes severe penalties, such as a penalty equal to three times the tax payable, which amounts to 90 per cent of the undisclosed income or asset, in addition to the 30 per cent tax. Furthermore, willful attempt to evade tax in relation to a foreign asset can lead to rigorous imprisonment from three years up to ten years. Failure to furnish a return in respect of foreign assets can result in rigorous imprisonment for a term of six months to seven years.
The Act connects to the Prevention of Money Laundering Act, 2002 (PMLA), as concealment of income related to a foreign asset is made a predicate offence under the PMLA. It also enables international cooperation for information exchange with foreign tax authorities. The Act provided a one-time compliance opportunity for a limited period, allowing persons to declare undisclosed foreign assets and pay a total levy (tax plus penalty) to avoid prosecution under the stringent provisions. In 2019, an amendment was made retrospectively to cover persons who were non-residents at the time of disclosure but were residents when the asset was acquired or income was earned outside India.