Five years after the stringent Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act was passed by the Parliament in 2016, the authorities are now set to issue the first set of show cause letters under the law, Economic Times.
The authorities may likely serve about 400 notices under the law nationwide. Of these, 40-50 are likely to be served in Mumbai alone. It should be noted that Mumbai accounts for the largest quantum of income tax collection in the nation.
Though the law was passed by the Parliament in 2015, it came into force on 1 April 2016. It is more stringent and wider than the Income Tax Act.
The law was instituted to overcome the limitations in the existing statutes and tax the hidden wealth of Indians stashed in tax haven banks abroad, or as other assets like properties through individual names, discretionary trusts, trusts and closely-held companies.
The Act empowers the authorities in the tax department to question assets acquired at any time in the past if they stumble upon the information in the present day.
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