OFFENCES AND PROSECUTIONSCentral

Section 51 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

Punishment for wilful attempt to evade tax.

(1)If a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine.
(2)If a person wilfuly attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that maybe imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and shall, in the discretion of the court, also be liable to fine.
(3)For the purposes of this section, a wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person—
1. (i)has in his possession or control any books of account or other documents(being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement; or
2. (ii)makes or causes to be made any false entry or statement in such books of account or other documents; or
3. (iii)wilfuly omits or causes to be omitted any relevant entry or statement in such books of account or other documents; or
4. (iv)causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof.

Summary

This provision sets out the punishments for people who purposely try to avoid paying taxes on foreign wealth.
If you try to evade the tax, penalty, or interest itself, you can be jailed for three to ten years.
If you try to avoid just the payment of these dues, the jail time is shorter, ranging from three months to three years.
Both types of jail time come with a fine that the court decides.
The law considers having fake account books or making false entries in your records as a way of cheating.
Intentionally leaving out information or creating situations to hide your money also counts as a crime under this rule.

Practical examples

1Ramesh has a bank account in Switzerland with ten crore rupees that he never told the tax office about. To hide it, he creates fake business receipts to make it look like the money came from a local sale. Since he is trying to evade the tax itself, he faces up to ten years in jail under Section 51.

2Sunita was caught with a hidden apartment in London and was ordered to pay a large tax bill. She quickly transfers all her local Indian money to her brother's account so the government cannot seize it for payment. She is now trying to evade the payment of tax and faces up to three years in jail under Section 51.

FAQ

1. What is the maximum jail term for evading tax under Section 51 of the Black Money Act?

Under Section 51 of the Black Money Act, a person who wilfully attempts to evade tax, penalty, or interest can be punished with rigorous imprisonment for up to ten years.

2. Does having a fake bank statement count as a crime under Section 51 of the Black Money Act?

Yes, Section 51 of the Black Money Act specifically includes having or making false entries in books of account or documents as a wilful attempt to evade tax.

3. Can I be fined instead of going to jail under Section 51 of the Black Money Act?

No, Section 51 of the Black Money Act requires rigorous imprisonment, which means hard labor in jail, and a fine is usually added on top of the jail time.

4. What happens if I just try to hide my money so I do not have to pay the tax bill under Section 51 of the Black Money Act?

If you try to evade the payment of the tax, Section 51 of the Black Money Act says you can be jailed for between three months and three years plus a possible fine.

Test yourself

Q1.Under Section 51 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, what is the minimum jail term for a person who wilfully attempts to evade the tax itself?

Q2.Which of these actions is specifically listed as a wilful attempt to evade tax under Section 51 of the Black Money Act?

Q3.If a person is convicted of evading the payment of tax under Section 51 of the Black Money Act, what is the maximum jail time the court can give?

Q4.Under Section 51 of the Black Money Act, what type of imprisonment is prescribed for tax evasion?

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OFFENCES AND PROSECUTIONSCentral

Section 51 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

Punishment for wilful attempt to evade tax.

(1)If a person, being a resident other than not ordinarily resident in India within the meaning of clause (6) of section 6 of the Income-tax Act, wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable under this Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine.
(2)If a person wilfuly attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that maybe imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to three years and shall, in the discretion of the court, also be liable to fine.
(3)For the purposes of this section, a wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person—
1. (i)has in his possession or control any books of account or other documents(being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement; or
2. (ii)makes or causes to be made any false entry or statement in such books of account or other documents; or
3. (iii)wilfuly omits or causes to be omitted any relevant entry or statement in such books of account or other documents; or
4. (iv)causes any other circumstance to exist which will have the effect of enabling such person to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof.

Summary

This provision sets out the punishments for people who purposely try to avoid paying taxes on foreign wealth.
If you try to evade the tax, penalty, or interest itself, you can be jailed for three to ten years.
If you try to avoid just the payment of these dues, the jail time is shorter, ranging from three months to three years.
Both types of jail time come with a fine that the court decides.
The law considers having fake account books or making false entries in your records as a way of cheating.
Intentionally leaving out information or creating situations to hide your money also counts as a crime under this rule.