Direct Tax Laws and International Taxation · Black Money Act, 2015

Black Money Act: Disclosure Compliance and Related Amendments

Updated 11 October 2026 · Fact-checked

Disclosure compliance under the Black Money Act, 2015 means a resident other than not ordinarily resident must report foreign assets and foreign income in the return of income. Failure brings a ₹10 lakh penalty and possible prosecution, except for non-immovable assets up to ₹20 lakh in aggregate. Sections 87 and 88 make consequential amendments to two other Acts.

Understand Disclosure Compliance and Related Amendments

The Black Money Act, 2015 extends to the whole of India. It came into force on 1 July 2015 (section 1, as substituted by the Removal of Difficulties Order, 2015). Its main charge is on undisclosed foreign income and assets. This topic covers three connected ideas: the one-time compliance window, the duty to report foreign assets in your return, and the amendments the Act made to other laws.

The one-time compliance window was a limited opportunity for a person holding an undisclosed foreign asset to make a declaration under section 59. If the conditions of the window were met, the declarant got relief. Section 69 is an example: where the undisclosed foreign asset is cash (including bank deposits), bullion or another asset specified in the declaration, wealth-tax is not payable on it for the earlier years in which the return was not filed or the asset was not shown. If the asset was understated, the understated amount is ignored only up to the voluntarily disclosed income used to acquire it. This relief works only if the conditions in sub-sections (1) and (2) of section 63 are fulfilled. Your answer should state that condition.

Ongoing reporting is the part examined most. A person who is a resident other than not ordinarily resident must disclose, in the return of income, any asset (including financial interest in any entity) located outside India that he held as beneficial owner or otherwise, or of which he was a beneficiary, and any income from a source outside India. Two defaults arise. One is not filing the return at all (sections 42 and 49). The other is filing a return that omits or misstates the foreign details (sections 43 and 50). Each default has a civil penalty of ₹10 lakh, imposed by the Assessing Officer, and a criminal punishment of rigorous imprisonment of six months to seven years with fine. Prosecution needs a wilful failure.

There is a relief threshold. The penalty sections and the prosecution sections do not apply to an asset or assets, other than immovable property, whose aggregate value does not exceed ₹20 lakh. Immovable property gets no such relief. The earlier threshold covered only bank accounts with a balance up to ₹5 lakh. The new proviso in sections 42 and 43 applies from 1 October 2024. The proviso in sections 49 and 50 was inserted by the Finance Act, 2026, with effect from 1 October 2024. Foreign currency balances are converted at the SBI telegraphic transfer buying rate on the relevant date.

Related amendments are consequential. Section 87 amends the Central Boards of Revenue Act, 1963 by inserting this Act as item (x) in sub-clause (1) of clause (c) of section 2 of that Act, after dropping the word "and" at the end of item (vii). Section 88 amends the Schedule, Part C, of the Prevention of Money-laundering Act, 2002 by adding entry (4): the offence of wilful attempt to evade any tax, penalty or interest referred to in section 51 of the Black Money Act. Tax evasion of this kind therefore also becomes a scheduled offence under the money-laundering law.

Key rules to remember

Who must comply: Resident other than not ordinarily resident (RNOR excluded); Sections 42, 43, 49 and 50 apply only to a resident other than not ordinarily resident. A non-resident or a not ordinarily resident person is outside these sections.
Civil penalty for non-filing (section 42): Penalty = ₹10,00,000, if no return is furnished before the end of the relevant assessment year; Applies to a person required to file a return who held a foreign asset, was a beneficiary, or had foreign income. The Assessing Officer may direct it.
Civil penalty for non-disclosure or inaccurate particulars (section 43): Penalty = ₹10,00,000; Applies where a return was filed but foreign assets or income were not reported, or inaccurate particulars were given.
Prosecution for non-filing (section 49): Rigorous imprisonment: minimum 6 months, maximum 7 years, plus fine; Needs wilful failure to file the return in due time. No proceedings if the return is furnished before the expiry of the assessment year.
Prosecution for non-disclosure in return (section 50): Rigorous imprisonment: minimum 6 months, maximum 7 years, plus fine; Needs wilful failure to give information about a foreign asset or foreign income in a return already filed.
Relief threshold: No penalty or prosecution if assets (other than immovable property) have aggregate value ≤ ₹20,00,000; Immovable property is not covered by the relief. The test is on aggregate value, so a single asset above ₹20 lakh, or several together above it, loses the relief.
Foreign currency conversion: Rupee value = foreign balance × SBI telegraphic transfer buying rate on the date of valuation; Used to test the ₹20 lakh threshold for foreign currency accounts.
Section 87 and section 88: s.87: Central Boards of Revenue Act, 1963, s.2(c)(1), new item (x). s.88: PMLA, 2002 Schedule, Part C, new entry (4); Entry (4) covers wilful attempt to evade tax, penalty or interest referred to in section 51 of the Black Money Act.

How to solve Disclosure Compliance and Related Amendments questions

Most questions give a person with foreign assets and ask about penalty, prosecution or relief. Work through the conditions in a fixed order so that you do not skip a test.

1Check the person's residential status. Only a resident other than not ordinarily resident is covered by sections 42, 43, 49 and 50. If the person is a non-resident or not ordinarily resident, say so and stop.
2Identify the foreign item: an asset (including financial interest in an entity) held as beneficial owner or otherwise, a beneficial interest, or income from a foreign source.
3Identify the default: was no return filed, or was a return filed that left out or misstated the foreign details?
4Apply the threshold. Separate immovable property from other assets. If the other assets together do not exceed ₹20 lakh, the penalty and prosecution sections do not apply to them. Immovable property never gets this relief.
5For non-filing, check timing. If the return was furnished before the expiry of the assessment year, there is no prosecution under section 49, and the section 42 penalty applies only where the return is not filed before the end of the assessment year.
6State the consequence: ₹10 lakh penalty by the Assessing Officer, and prosecution with imprisonment of six months to seven years and fine if the failure is wilful.
7If the question mentions the one-time window, check whether a declaration was made and whether the section 63 conditions were met before granting relief such as the section 69 wealth-tax exemption.
8Close with a one-line recommendation, such as filing or revising the return and reporting every foreign asset.

Quickest way: Four-question check for foreign asset defaults

When to use it: Use for MCQs and short case questions where you must decide quickly whether a penalty or prosecution applies.

Is the person a resident other than not ordinarily resident? If no, no liability under these sections.
Is any foreign asset immovable property? If yes, the ₹20 lakh relief is not available for it.
Are the other foreign assets together ≤ ₹20 lakh? If yes, they are outside the penalty and prosecution.
Is the failure wilful for prosecution? Penalty is ₹10 lakh; prosecution is 6 months to 7 years plus fine. For non-filing, check if the return came before the assessment year ended.

Common mistakes in Disclosure Compliance and Related Amendments

Applying the ₹20 lakh relief to a foreign flat or land.
Students remember the threshold but forget the words "other than immovable property".
Fix: Always split the assets into immovable property and others. Test only the others against ₹20 lakh.
Quoting the old ₹5 lakh bank balance limit.
Older notes and earlier questions used that limit.
Fix: Use the current proviso: aggregate value of assets other than immovable property not above ₹20 lakh, not just bank accounts.
Applying these sections to a not ordinarily resident or non-resident.
Students focus on the foreign asset and skip residential status.
Fix: Write the residential test first. The sections apply only to a resident other than not ordinarily resident.
Imposing prosecution without checking wilfulness.
Students treat penalty and prosecution as the same consequence.
Fix: Penalty is imposed by the Assessing Officer. The prosecution sections 49 and 50 require a wilful failure, so mention that word.
Mixing up section 49 with section 50, or section 42 with section 43.
The wording is similar and the punishment is the same.
Fix: Remember the pairs: 42 and 49 are about not filing a return. 43 and 50 are about omissions or inaccuracies in a return that was filed.
Treating the section 69 wealth-tax exemption as automatic.
Students read only the exemption and ignore sub-section (2).
Fix: State that relief applies only if the conditions in sub-sections (1) and (2) of section 63 are fulfilled, and only for the assets specified in the declaration made under section 59.

Worked examples

Example 1

Rohan, a resident other than not ordinarily resident, files his return on time. He did not report (a) a bank account in Singapore with an aggregate balance equal to ₹15,00,000, and (b) a flat in Dubai worth ₹60,00,000. Discuss the position under the Black Money Act, 2015.

Show the solution

Rohan is a resident other than not ordinarily resident and has filed a return, so section 43 (penalty) and section 50 (prosecution) are the relevant sections.
Part (a): the bank balance is an asset other than immovable property. Its aggregate value, ₹15,00,000, does not exceed ₹20,00,000. The proviso therefore excludes it from sections 43 and 50.
Part (b): the Dubai flat is immovable property. The proviso to sections 43 and 50 does not cover immovable property, so the non-disclosure is within the sections whatever the value.
Consequence under section 43: the Assessing Officer may direct a penalty of ₹10,00,000.
Consequence under section 50: if the omission was wilful, he can be prosecuted with rigorous imprisonment of 6 months to 7 years and fine.

Answer: No penalty or prosecution arises for the ₹15 lakh bank balance. The unreported Dubai flat attracts a penalty of ₹10,00,000 under section 43 and, if wilful, prosecution under section 50 with rigorous imprisonment of 6 months to 7 years and fine.

Example 2

Meera, a resident other than not ordinarily resident, held shares in a Singapore company worth ₹45,00,000 and was required to file a return for an assessment year. Case 1: she filed the return after the due date but before the assessment year ended. Case 2: she never filed the return. Explain the consequences.

Show the solution

The shares are a financial interest in an entity located outside India and are not immovable property. The aggregate value of ₹45,00,000 exceeds ₹20,00,000, so the threshold relief is not available.
Case 1: section 49 provides that no one is proceeded against for failure to furnish the return in due time if the return is furnished before the expiry of the assessment year. So there is no prosecution.
Case 1 also: section 42 applies only where the return is not furnished before the end of the relevant assessment year. Here it was furnished in time, so there is no section 42 penalty.
Case 2: no return was filed before the end of the assessment year, so the Assessing Officer may direct a penalty of ₹10,00,000 under section 42.
Case 2 also: if the failure was wilful, section 49 allows prosecution with rigorous imprisonment of 6 months to 7 years and fine.

Answer: Case 1: no prosecution under section 49 and no penalty under section 42, because the return was furnished before the assessment year expired. Case 2: ₹10,00,000 penalty under section 42, and prosecution under section 49 with rigorous imprisonment of 6 months to 7 years and fine if the failure was wilful.

Exam tips

Learn the section pairs. Sections 42 and 43 are penalties, sections 49 and 50 are prosecutions, and each pair covers the "no return" and "incomplete return" cases.
In a case question, write the residential status and the immovable property test before computing anything. These two points carry most marks.
For sections 87 and 88, remember what each Act receives: the Central Boards of Revenue Act, 1963 (new item (x)) and the PMLA Schedule, Part C (new entry (4)). A one-line MCQ is common.
Use the exact figures: ₹10 lakh penalty, ₹20 lakh threshold, 6 months to 7 years imprisonment, effective date 1 October 2024 for the new threshold.
For the one-time window, quote the section 63 conditions as a requirement for the section 69 relief and avoid unsupported details.

Practice questions from Black Money Act, 2015

Disclosure Compliance and Related Amendments: frequently asked questions

Who must report foreign assets in the return under the Black Money Act?

A person who is a resident other than not ordinarily resident and who held a foreign asset as beneficial owner or otherwise, was a beneficiary of one, or had foreign income. The return must include these details. Omitting them can lead to a ₹10 lakh penalty and prosecution if wilful.

Is there a minimum value below which foreign assets need not be reported to avoid penalty?

Yes. Sections 42, 43, 49 and 50 do not apply to an asset or assets other than immovable property if their aggregate value does not exceed ₹20 lakh. Immovable property outside India does not get this relief.

What do sections 87 and 88 of the Black Money Act do?

Section 87 amends section 2 of the Central Boards of Revenue Act, 1963 and adds the Black Money Act as item (x) in sub-clause (1) of clause (c). Section 88 amends the Schedule, Part C, of the Prevention of Money-laundering Act, 2002, adding entry (4) for wilful attempt to evade tax, penalty or interest referred to in section 51 of the Black Money Act.

Does the section 69 wealth-tax relief apply to every declarant?

No. It covers cash (including bank deposits), bullion or other assets specified in the declaration made under section 59. It applies only if the conditions in sub-sections (1) and (2) of section 63 are fulfilled by the declarant.