The Central Board of Direct Taxes (CBDT) has raised the exemption limit for undisclosed foreign assets.
The board has amended the Instruction issued under Section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA, 2015) read with Section 119 of the Income tax Act, 1961 regarding prosecution provisions under BMA, 2015.
Central Board of Direct taxes (Board’) had issued an Instruction clarifying that prosecution under section 49 and/or 50 of BMA, 2015 shall not be initiated in cases where penalty under section 42 and/or 43 of the BMA, 2015 is not imposed or imposable, in relation to assets covered under the proviso to aforesaid sections i.e, an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to Rs.5 lakh at any time during the previous year. The instruction aimed to protect individuals holding foreign accounts with minor balances that might not have been reported due to oversight or ignorance, by providing that non-disclosure of such accounts will not attract penalty or prosecution.
The Finance (No.2) Act. 2024 has substituted the proviso to section 42 and 43 of the BMA, 2015 w.e.Ã 01.10.2024 and current proviso to section 42 and section 43 reads as under, “Provided that this section shall not apply in respect of an asset or assets (other than immovable property) where the aggregate value of such asset or assets does not exceed twenty lakh rupees”.
The amendment has expanded the scope of assets, which are not amenable to penalty provisions under section 42 and/or 43 of the BMA, 2015, while the existing Instruction continues lo provides protection from prosecution proceedings only in respect of assets, which are covered by the unamended provisions.
The board in order to provide relief from institution of prosecution proceedings under section 49 and/or 50 of BMA, 2015, in respect of assets) covered under the proviso to penalty provisions under section 42 and 43 of BMA, 2015, it has been decided to amend the Instruction dated 15.03.2022.
The Board amended Instruction dated 15.03.2022 and directs that prosecution proceedings under section 49 and/or 50 of BMA, 2015, would not be initiated in cases where penalty under section 42 and/or 43 of the BMA, 2015 is not imposed or imposable in relation to assets covered under the proviso to aforesaid sections i.e an asset or assets (other than immovable property). where the aggregate value of such asset or assets does not exceed a value equivalent to Rs.20 lakh at any time during the relevant previous year.
Instruction Details
Date: 18/08/2025
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