Hidden Foreign Account? Black Money Act Costs You 30%

If you hold an undisclosed foreign bank account or overseas shares and haven't declared them to Indian tax authorities, the Black Money Act 2015 can hit you with a flat 30% tax plus 90% penalty — no exemptions, no deductions, no mercy.

Here's what happened: India's Income Tax Appellate Tribunal upheld a tax demand on a taxpayer who held an undisclosed Dubai bank account and UAE shares not declared in Indian tax returns.. Under Section 3 of the Black Money Act 2015, tax is levied in the year the Assessing Officer discovers the foreign asset — not the year it was created or earned income.. The Black Money Act imposes a flat 30% tax on the total value of undisclosed foreign assets with no basic exemption, deduction, or treaty benefit available to the taxpayer..

What you should do: Check your ITR's Schedule FA (Foreign Assets) section and declare every overseas bank account, property, or shareholding you hold or held as an Indian tax resident.. If you returned to India from abroad and have old NRI accounts, close them formally or convert them to RFC/NRO accounts and disclose in your current year's ITR immediately.. Consult a tax professional about the one-time disclosure route if you have undisclosed foreign assets — voluntary disclosure before detection dramatically reduces penalty exposure..

Pro tip: Even a zero-balance or closed foreign account must be reported in Schedule FA if it existed during the financial year — 'nil balance' is not a valid reason to skip disclosure.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.