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The government will give immunity from prosecution under FEMA, Prevention of Money Laundering Act and four other laws to persons declaring undisclosed foreign assets under the compliance window of the new Black Money Act.
The one-time 90-day compliance window being provided to foreign asset holders to come clean will, however, not guarantee immunity for wealth generated from corruption, according to FAQs on Black Money law issued by the Finance Ministry on Monday.
On the provision of the compliance rules that bars persons against whom the government has prior information for making disclosures, the Finance Ministry said declarations by such persons will be dealt under the Income Tax Act and not under the stringent Black Money law.
This concession will be available only to persons who had not received any intimation from the tax department having prior information about their foreign assets.
On whether government has any prior information, persons making declarations will be intimated by October 31, a month after the closure of 90-day compliance window on September 30.
In case they do not receive any such information, they will have to pay 30 per cent tax and an equivalent amount of penalty by December 31.
Disclosures made, the FAQs said, will enjoy ‘immunity from prosecution under the five Acts viz. the Income-tax Act, Wealth Tax Act, FEMA, Companies Act and Customs Act.’
It, however, does not provide immunity from prosecution under 'any other Act'.
Giving example, the FAQ said, if the undisclosed asset has been acquired out of the proceeds of sale of protected animals the person will not be eligible for immunity under the Wildlife (Protection) Act, 1972.
The offence of willful attempt to evade tax will also not be an offence under the Prevention of Money Laundering Act, it added.
Image: A black market currency trader shows off US and Zimbabwean bank notes in the capital Harare. Photograph: Reuters