New Delhi: Undisclosed overseas assets such as immovable property, jewellery, shares and art works will be valued at fair market price for the purpose of tax and penalty under the new black money law. Besides, the value of an overseas bank account will be the sum of all deposits made in the account since its opening, the Tax Department said today while announcing rules for the new law that has come into force with effect from July 1.
In case of current fair market value of assets being below the acquisition cost, the Tax Department will consider the original purchase value for computation of tax and penalties. According to the rules notified by the Central Board of Direct Taxes (CBDT), persons having undisclosed assets abroad will have to declare them in a prescribed format in rupee terms during the 90-day compliance window ending September 30 by paying 60 per cent tax and penalty.
They will have time till December 31 to pay the levies. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, provides for a total of tax and penalty of 120 per cent on the income or assets held abroad after the expiry of the window.
The rules stated that foreign income and assets would be valued for calculation of tax and penalty both for the compliance period and beyond its expiry. The fair market value of an immovable property will be higher from the acquisition cost or the price that the property shall fetch in open market on the date of valuation.
The same principle would also be applicable for valuing bullion, jewellery, precious stone, drawings, paintings, archaeological collections, and sculptures or work of art. For shares and securities, the fair market value will be the higher of the cost of acquisition or average of the lowest and highest price on the date of valuation.
Along with the rules, the CBDT has appended seven forms including those which have to be filled by persons while declaring the overseas undisclosed assets.
The holders of the assets will have to disclose details of the assets with regard to its location, fair market value and date of acquisition.