Black Money Act Amended to Relax Conditions for Prosecution of Non-Disclosure of Foreign Assets

The government in the Union Budget 2026 proposed to relax the prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. Now, the taxpayers will not be penalised for not disclosing a foreign asset if its aggregate value is up to Rs 20 lakh.

The resident and ordinarily resident (ROR) Indians are required to disclose all the foreign assets (such as bank accounts, equity, and real estate) and income in their Income Tax Return (ITR) using Schedule FA and Schedule FSI. The Black Money Act deals with the penalty and prosecution measures in cases involving wilful non-disclosure of foreign income and assets by the resident.

Section 49 and Section 50 of the Black Money Act provide the prosecution, including rigorous imprisonment and a fine if the taxpayers willfully do not file their ITR or wilfully do not disclose their foreign assets in their ITR.

However, in an effort to give relief for the case involving minor and inadvertent non-disclosures, the Budget 2026 proposed to amend Sections 49 and 50 to provide that these provisions will not apply to the non-disclosed foreign assets (except immovable property) if the total value is not more than Rs 20 lakh.

Therefore, now there will be no prosecution under the Black Money Act if the value of a non-disclosed foreign asset is up to Rs 20 lakh. This new change aims to align the prosecution rules with the penalty framework under the Black Money Act.

This amendment has a retrospective effect from October 1, 2024, which means that this amendment also applies to cases on or after October 2024.