New Delhi: Armed with the automatic information exchange pact with the US, the government has asked persons holding undisclosed offshore assets to declare them before September 30 as it would be difficult to hide unaccounted assets in future.
Revenue Secretary Shaktikanta Das said the FATCA agreement, which India signed with the US on Thursday, will entail automatic exchange of financial information. This would be in addition to multilateral agreement on Automatic Exchange of Information (AEOI), which comes into effect from 2017.
"So it is going to be very difficult for anyone who has offshore assets or banking investments which is undisclosed... to escape the arm of law. The compliance window is an opportunity which one would expect everyone to avail of," he told reporters in New Delhi.
As many as 110 tax jurisdictions have committed to share information under the US government's Financial Account Tax Compliance Act (FATCA). India will start getting information under FATCA from September 30.
Under AEOI, 58 jurisdictions (including India) have agreed to share information under from 2017 and 36 nations from 2018. These include those jurisdictions which have beneficial tax regime.
The information under the AEOI will include information of controlling persons (beneficial owners) of the asset.
Trying to deal with the menace of unaccounted wealth stashed abroad, the government has operationalised the new black money law from July 1.
Giving a last chance to persons holding unaccounted wealth abroad to come clean, the government has provided a one time 90-day voluntary compliance window which will remain open till September 30.
The disclosures will attract a total of 60 per cent tax and penalty, which has to be paid by December 31, 2015.
Those who will fail to take advantage of the compliance window to declare unaccounted assets and income, will have to pay tax and penalty of 120 per cent tax and face jail term which could extend up to 10 years.