Section 42 of The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in hindi
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, who is required to furnish a return of his income for any previous year, as required under sub-section (1) of section 139 of the Income-tax Act or by the provisos to that sub-section, and who at any time during such previous year,--
- (i)held any asset (including financial interest in any entity) located outside India as a beneficial owner or otherwise; or
- (ii)was a beneficiary of any asset (including financial interest in any entity) located outside India; or
- (iii)had any income from a source located outside India, and fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of ten lakh rupees: 1[Provided that this section shall not apply in respect of an asset or assets (other than immovable property) where the aggregate value of such asset or assets does not exceed twenty lakh rupees.] Explanation.--For determining the value equivalent in rupees of the balance in an account maintained in foreign currency, the rate of exchange for calculation of the value in rupees shall be the telegraphic transfer buying rate of such currency as on the date for which the value is to be determined as adopted by the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955).
Summary
- This provision punishes residents who fail to file their tax returns on time if they have foreign assets.
- It applies to people who hold foreign assets as owners, are beneficiaries of such assets, or have foreign income.
- If the return is not filed by the end of the relevant assessment year, the penalty is a flat ten lakh rupees.
- For bank accounts in foreign currency, the value is calculated using the telegraphic transfer buying rate from the State Bank of India.
Practical examples
FAQ
1. What is the penalty for not filing a return under Section 42 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015?
The penalty is a fixed sum of ten lakh rupees for failing to furnish the required return of income.
2. Does Section 42 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, apply to everyone living in India?
It applies to residents, but specifically excludes those who are "not ordinarily resident" as defined by the Income tax Act.
3. How is foreign currency converted for the penalty in Section 42 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015?
It is converted to rupees using the telegraphic transfer buying rate adopted by the State Bank of India on the date the value is determined.
Test yourself
Q1.Under Section 42 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, what is the penalty amount for failing to furnish a return?
Q2.To whom does the penalty in Section 42 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, NOT apply?
Q3.Under Section 42 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, what is the deadline for filing the return to avoid this penalty?
Q4.According to Section 42 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, which bank's exchange rate is used for currency conversion?