UNACCOUNTED foreign assets & income are a threat, prompting people to evade tax through illegal channel. Hounding, bringing back illegally concealed money/ assets abroad and curbing such activities has been of utmost importance for India. Access to information and the over increasing exchange between various governments all across the world hugely aids to this effort. Given this background, the need of the hour was introduction of a specific legislation to comprehensively and effectively deal with the such issue and accordingly, the Indian Government had introduced "The Black Money (Undisclosed foreign income and assets) Imposition of Tax Act 2015".

As per the existing provisions of BMA, it covers 'persons' who are residents of India and attaches stringent provisions in the form of levy of thirty percent tax and three times penalty along with initiation of prosecution proceeding, for the default of non-disclosure. Although, the BMA offered a one-time compliance window for a limited period as an opportunity for taxpayers to come clean and voluntarily disclose overseas undisclosed assets relating to tax year prior to 2015-16.

Now, the loophole which has shadowed the strigency under the BMA was the provision of section 2 which provide that the "assessee" means a person who is resident other than not ordinarily resident in India within the meaning of section 6 (6) of the Income-tax Act by whom tax in respect of undisclosed foreign income and assets are payable under the said Act. This implies that undisclosed foreign income and assets of individual and HUF are taxable only if such person is resident and ordinarily resident in India in A.Y 2016-17 or any subsequent A.Y. Therefore, if a person was resident during years prior to A.Y 2016-17 when the undisclosed foreign income was earned or when the undisclosed foreign asset was acquired and becomes not ordinarily resident or non-resident from A.Y 2016-17, he cannot be taxed under the BMA. He can only be taxed under the Income-Tax Act subject to the 16 years time-limit for reopening the assessment under that Act.

Hence, in order to clarify the legislative intent behind enfoercing the BMA, which was to tax such foreign income and assets, which were not charged to tax under the Income-tax Act, the Finance Minister has proposed in the Union Budget 2019-20 to retrospectively amend the provision of Sec 2(2) so as to include within the meaning of "assessee", the person who was resident in India either in the previous year to which the income referred to in section 4 relates, or in the previous year in which the undisclosed asset located outside India was acquired. It was further proposed that the term "assessee" will include a 'resident in India'/ 'non-resident'/ 'Not ordinarily resident in India'. It is also proposed to provide that the previous year of acquisition of the undisclosed asset located outside India shall be determined without giving effect to the provisions of section 72(c) of the BM Act.

In addition, the Finance Minister has also proposed amendments u/s 10 of Black Money Act with retrospective effect, so as to include the words "re-assess" and "reassessment" in sub-sections (3) and (4) of the Section 10. Also, powers of CIT(A) granted u/s 17 of BMA has been expanded with prospective effect so as to authorise him to enhance or reduce the penalty.