If you’re a foreigner working in India, this new law might make you a little uncomfortable
Advertisement
One of the biggest promises that Prime Minister Narendra Modi made before the 2014 Lok Sabha Elections was that he would bring back black money stashed abroad. Though not much has been done on that front yet, but a proposed black money law is on its way. This new law will not only crack down on concealed income with Indians but also that with expatriates and their families.
According to a recent Economic Times report, tax advisors have begun to receive queries from companies that employ foreigners, with some planning to lobby the government to relax the requirements. But relief seems unlikely since other countries such as the US impose similar obligations.
The ET report claims that the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, which proposes harsh penalties and prosecution for non-disclosure of overseas assets defines assessees as including all persons who are residents of India. Expatriates, who usually become residents after a stay of 2-3 years, should be more wary of this bill.
Vikas Vasal, partner,KPMG , beautifully explained why expatriates should be careful in disclosing their income and assets. He told the ET, "Expatriates who become residents, based on their physical stay in India, should be careful in disclosing their foreign income and assets in their Indian tax return going forward as non-disclosure or non-adequate disclosure could thereby trigger a dispute."
Experts believe that reviewing overseas bank accounts and assets is really important. While talking to the ET, Kuldip Kumar, leader, personal tax, PwC, elucidated, "Now is the time to review overseas bank accounts and assets and ensure that they were properly reported in past returns. If not, now is also the time to correct the reporting because once the proposed legislation comes into force, there could be severe consequences."
Currently, the Indian tax form requires disclosure of foreign assets such as bank accounts, interest in any entity, immovable property. It also requires disclosure of investments, accounts in an institution where an individual has a signing authority, and trusts in which the person is a trustee, beneficiary or settlor.
Kumar cautioned that companies should share this information with their expatriate employees who are ordinarily resident in India or are to be posted to the country so that they are aware of their obligations.
The ET report further added, “If this Bill becomes the law, then India will join the US and others in mandating such disclosures on the part of individuals, including expatriates who have become tax residents. India will also sign an agreement with the US that will facilitate exchange of information on their respective citizens.”
Advertisement
According to a recent Economic Times report, tax advisors have begun to receive queries from companies that employ foreigners, with some planning to lobby the government to relax the requirements. But relief seems unlikely since other countries such as the US impose similar obligations.
The ET report claims that the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015, which proposes harsh penalties and prosecution for non-disclosure of overseas assets defines assessees as including all persons who are residents of India. Expatriates, who usually become residents after a stay of 2-3 years, should be more wary of this bill.
Vikas Vasal, partner,
Experts believe that reviewing overseas bank accounts and assets is really important. While talking to the ET, Kuldip Kumar, leader, personal tax, PwC, elucidated, "Now is the time to review overseas bank accounts and assets and ensure that they were properly reported in past returns. If not, now is also the time to correct the reporting because once the proposed legislation comes into force, there could be severe consequences."
Advertisement
Kumar cautioned that companies should share this information with their expatriate employees who are ordinarily resident in India or are to be posted to the country so that they are aware of their obligations.
The ET report further added, “If this Bill becomes the law, then India will join the US and others in mandating such disclosures on the part of individuals, including expatriates who have become tax residents. India will also sign an agreement with the US that will facilitate exchange of information on their respective citizens.”
Advertisement
- I got a $40K raise using this 30-second strategy. It made me realize loud work, not hard work, always wins.
- Qatar Airways' new CEO explains why it's sticking with the Airbus A380 as other airlines retire the costly superjumbo
- Prince Harry and Meghan found out about Kate Middleton's cancer diagnosis on TV like everyone else, report says
- FPIs make remarkable comeback, infuse ₹2 lakh cr in FY24
- PM Modi and Bill Gates discuss AI, climate change, millets and more
- Consuming excessive salt and inadequate potassium, protein is making North Indians prone to life-threatening diseases: Study
- Upcoming cars and two-wheelers launching in India in April 2024
- Ice melt in Antarctica and Greenland is slowing Earth's rotation, affecting timekeeping: Study