The summary highlights the key difference between the scope of ...

Distinct Scope: Income Tax Act vs Black Money Act on Undisclosed Foreign Assets/Income.

Case Laws     Income Tax

October 14, 2024

The summary highlights the key difference between the scope of total income under the Income Tax Act and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA). While the Income Tax Act covers all income from whatever source derived, the BMA only considers undisclosed assets located outside India and undisclosed foreign income and assets. Section 4(3) of the BMA explicitly states that income included as undisclosed foreign income and assets shall not form part of the total income under the Income Tax Act. Additionally, Section 65 of the BMA prohibits reopening assessments or claiming set-offs under the Income Tax Act for declared undisclosed assets. The summary emphasizes that the findings under the Income Tax Act proceedings have guiding value but no binding effect on BMA proceedings due to the different scopes of income. It also highlights the distinctions between the deeming provisions of Sections 68 and 69 of the Income Tax Act and the definitions u/ss 2(11) and 2(12) of the BMA. Ultimately, the summary concludes that the assessee is not obliged to disclose overseas assets/income in Income Tax Returns for the relevant assessment years when no specific column existed, as the declaration under the BMA can be made after its commencement date.

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