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Non-disclosure of foreign assets comes back to haunt thousands

Non-disclosure of foreign assets comes back to haunt thousands

A flurry of summons from the Income tax (I-T) investigation wing and the Enforcement Directorate (ED) over the past fortnight has come as a rude reminder to many that despite paying tax they may have a brush with the law.

Thousands of recipients of such letters have been caught in a stern, yet often ignored, provision of the statute that requires a mandatory disclosure of all foreign assets like ownership in a company, properties, and accounts with overseas banks, three persons familiar with the development told ET.

Nonetheless, many hold back such information due to their unfamiliarity with the law, laxity in the filing of tax returns, and fears that such declarations could trigger more queries from the tax office.

But, there is a stiff cost to such non-disclosures, as many are discovering: a penalty of ?10 lakh a year under Black Money Act (BMA) - so, if a bank account was opened five years ago and has remained a 'secret' since then, the basic fine will be ?50 lakh if the assesse is unable to convince tax authorities.

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