One may wonder that Black Money Act is for people having black money in Foreign banks and not for the common taxpayer. But beware of such a notion! One may get sleepless nights and may get hound with notices under Black Money Act for mere forgetting to disclose the details of foreign assets and bank accounts in their Income Tax Returns (ITR) which might be the simple clerical error of you or your tax advisor while filing ITR.
Every person who is
resident in India if fails to disclose in his ITR:
(a) Any
asset located outside India including financial interest in any entity whether
he is holding it as a beneficial owner or OTHERWISE or
(b) A
beneficiary of any foreign asset or
(c) Had
any income from outside India
..Is liable for a penalty
of Rs 10 Lacs.
It is very common for
corporate executives to be a signatory to foreign bank accounts of entities of
their employers or holding shares and another asset as the nominee of their
employers in foreign entities, which needs to be disclosed in THEIR PERSONAL
ITR also.
It is now days witnessed
that many executives failed to make such disclosures while filling their
personal ITR under the impression that such disclosures being corporate matter
to be disclosed and complied with in ITR of their employer and not in their
personal ITR. This can prove to be a grave mistake.
In such case, even though
there is no undisclosed black money or foreign asset issue being involved one
may suffer a heavy penalty and also face rigours of inquiry and investigations
under the Act.
This is so as Income Tax
Department will compare their internal data of foreign banking accounts with
that of ITR of signatories to such bank accounts and will raise red flag
pushing tax authorities to inquire and investigate.
Therefore, every taxpayer
must take due care while filling their personal ITR and make all disclosures for
such matters precisely to avoid such unwanted mishaps dragging them into undue
regulatory and legal hassles for no obvious reason.
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