The RBI issued the RBI (Regularisation of assets held abroad by person resident in India) Regulations, 2015 (“Regulations”), by a notification dated September 25, 2015. This is in context of the declarations made, taxes and fines paid, under and as a result of the enactment of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (“Black Money Act”). The Black Money Act provides for separate taxation of income and assets acquired abroad from income undisclosed but which is subject to tax in India.
Given the operation of the Black Money Act, the Regulations provide the following:
- No proceedings shall lie under the Foreign Exchange Management Act, 1999 (“FEMA”), against the declarant with respect to an asset held abroad, for which taxes and penalties have already been paid under the Black Money Act.
- No permission under FEMA will be required to dispose declared assets or to bring the proceeds of the disposal to India through banking channels within 180 (one hundred eighty) days. However, if the declarant wishes to continue holding the asset, an application must be made to the RBI within 180 (one hundred eighty) days from the date of declaration. In the event that permission is not granted by the RBI, the asset(s) will have to be disposed within 180 (one hundred eighty) days from the date of receipt of communication from the RBI and the sale proceeds will have to be bought in through normal banking channels.
This clarification ensures that those who have already been subject to a penalty in violation of FEMA and regulations thereof, are not put through double jeopardy.