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CMA Final · Direct Tax Laws and International Taxation

Black Money Act, 2015 for CMA Final Paper 15

The Black Money Act, 2015 taxes undisclosed foreign income and assets of assessees at a flat 30%, with no deductions or set-off of losses. To solve questions, first check if the person is an assessee, then whether the income or asset is undisclosed, then compute the value, reduce for taxed funds, and apply the rate.

What this chapter covers

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 is a separate Act, not part of the income-tax law. It extends to the whole of India and came into force on 1 July 2015. It taxes two things: income from a source outside India that was not disclosed, and the value of an undisclosed asset located outside India.

The chapter has a clear logic. First you ask who is an assessee. Then you ask what is undisclosed. Then you find the amount chargeable at 30% (the charge applies to assessment years commencing on or after 1 April 2016). Under the Act, income taxed here does not form part of total income under the income-tax law. Assessment, appeals, penalties, prosecution and the one-time declaration window follow from that.

In Paper 15 this chapter links to residential status, foreign income and assets, and international taxation. Residential status decides who is an assessee. The Act's own text refers to the Income-tax Act, 1961 for several definitions. For June 2027, check how ICMAI's latest study material and updates read those references against the Income-tax Act, 2025, and use the current form in your answers.

This chapter is compact, and its questions are rule-based. That suits both a short MCQ and a 14-mark written question. A single rule, such as the flat 30% rate, the bar on deductions, or the reduction for already-taxed funds, can decide an answer. Many students skip it as a small chapter. If you learn the definitions and the one worked computation well, you gain marks that others leave behind.

Black Money Act, 2015: topics in the order to study them

  1. 1Black Money Act 2015: Scope and Key DefinitionsStart here. Every later rule depends on who is an assessee and what counts as an undisclosed asset located outside India.
  2. 2Charge of Tax on Undisclosed Foreign Income and AssetsNext, learn the 30% charge, the no-deduction rule and the reduction for taxed funds. This is where the numerical questions come from.
  3. 3Assessment Procedure and Appeals under the Black Money ActOnce you know what is taxed, learn how the Assessing Officer assesses it and how the order can be challenged.
  4. 4Penalties and Prosecution under the Black Money ActPenalties and offences make sense only after you know the charge and the assessment, so they come fourth.
  5. 5Disclosure Compliance and Related AmendmentsFinish with the one-time declaration scheme and the amendments to other laws. These need the earlier rules for comparison.

How to prepare Black Money Act, 2015

Treat this chapter as a short decision path, not a pile of sections. Learn the path first, then add detail.

  1. Write the path on one page: assessee? undisclosed? value? reductions? 30% tax. Use it to answer every question.
  2. Learn the definition of assessee: a resident, or a non-resident or not ordinarily resident who was resident in the relevant previous year or in the year the asset was acquired.
  3. Learn the definition of undisclosed asset located outside India: held in his name or as beneficial owner, with no explanation of the source of investment, or one the Assessing Officer finds unsatisfactory.
  4. Practise the reduction computation. Use the Act's own example: a house bought for ₹50,00,000, of which ₹20,00,000 was taxed earlier, now worth ₹1,00,00,000. Reduction = ₹1,00,00,000 × 20 ÷ 50 = ₹40,00,000. Chargeable value = ₹60,00,000. Tax at 30% = ₹18,00,000.
  5. Make a short table in your notes of the penalties, offences and time limits from your ICMAI study material and the latest updates. Do not guess these figures. Revise the table every week.
  6. Learn the declaration scheme in order: declare, pay tax and penalty by the notified date, and then the asset is kept out of total income.
  7. Solve past MCQs and case questions. For each, name the rule you used before you pick the answer.

Common mistakes in Black Money Act, 2015

  • Deducting expenses or setting off losses before applying the 30% rate.

    Fix: Remember that the Act allows no deduction of any expenditure or allowance and no set-off of loss, whether or not the income-tax law allows it.

  • Treating every person with a foreign asset as an assessee.

    Fix: Check residential status first. A non-resident or not ordinarily resident is an assessee only if he was resident in the relevant previous year or in the year the asset was acquired.

  • Taxing the asset at its cost, or in the year it was bought.

    Fix: Tax the value in the previous year in which the asset comes to the notice of the Assessing Officer. The reduction for taxed funds uses the value on the first day of the financial year in which it comes to notice.

  • Subtracting the taxed amount directly instead of using the proportion.

    Fix: For immovable property, reduce by asset value × taxed amount ÷ total cost. In the Act's example this gives ₹40,00,000 and chargeable value ₹60,00,000, not ₹80,00,000.

  • Assuming income-tax variations are also taxed under this Act.

    Fix: Variations made in assessment under the income-tax law's provisions on business and other income computation, and on transfer pricing, are not included in total undisclosed foreign income.

  • Quoting penalty amounts or time limits from memory.

    Fix: Take penalties, prosecution terms and time limits only from your ICMAI study material and the latest updates. Revise them from your own notes.

Last-day revision: Black Money Act, 2015

  • The Act extends to the whole of India and came into force on 1 July 2015.
  • Tax is charged at 30% on total undisclosed foreign income and asset, for assessment years commencing on or after 1 April 2016.
  • An undisclosed asset is charged on its value in the previous year in which it comes to the notice of the Assessing Officer.
  • Value means fair market value, determined in the prescribed manner, including financial interest in any entity.
  • Assessee: a resident, or a non-resident or not ordinarily resident who was resident in the relevant previous year or the acquisition year.
  • Undisclosed asset: held in his name or as beneficial owner, with no explanation of source or an unsatisfactory one.
  • No deduction for expenditure or allowance and no set-off of loss is allowed, whether or not the income-tax law would allow it.
  • Income already assessed to tax is reduced from the asset value, but only if you give evidence to the Assessing Officer's satisfaction.
  • Income taxed under this Act does not form part of total income under the income-tax law.
  • Direct assessment of the person for whose benefit the income or asset is held is not barred.
  • Declared assets are taxed at 30% of value on the date of commencement. They stay out of total income only if tax and penalty are paid by the notified date.
  • Wilful attempt to evade tax, penalty or interest under the Act is a scheduled offence under the Prevention of Money-laundering Act, 2002.

Black Money Act, 2015 practice questions

Black Money Act, 2015 in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Black Money Act, 2015: frequently asked questions

Is the Black Money Act part of the Income-tax Act?

No. It is a separate Act with its own charge, assessment and offence provisions. Income taxed under it does not form part of total income under the income-tax law. It still borrows definitions such as residential status from the income-tax law.

What is the tax rate under the Black Money Act, 2015?

The rate is 30% of the undisclosed foreign income and asset. An undisclosed asset is charged on its value in the previous year in which it comes to the notice of the Assessing Officer. No deduction or set-off of loss is allowed.

Who is an assessee under this Act?

An assessee is a resident in the previous year. It also includes a non-resident or not ordinarily resident who was resident either in the previous year to which the income relates or in the previous year in which the undisclosed asset was acquired.

How do I reduce the asset value for income already taxed?

You must give evidence to the Assessing Officer that the asset was acquired from income already assessed or assessable. For immovable property, reduce the value by the same proportion that the taxed income bears to the total cost. In the Act's example, ₹1,00,00,000 is reduced by ₹40,00,000 to give ₹60,00,000.

Does the Act refer to the Income-tax Act, 1961 or the Income-tax Act, 2025?

The official text supplied for this guide refers to the Income-tax Act, 1961 in its definitions and cross-references. For June 2027, follow ICMAI's latest study material and updates on how those references are to be read, and use the form it prescribes.