Moment guide · FY 2026-27

I am worried about the Black Money Act on undisclosed foreign assets

What are the penalties for undisclosed foreign assets under the Black Money Act?

The Black Money Act 2015 applies to resident and ordinarily resident individuals, taxing undisclosed foreign income and penalising undisclosed foreign assets at 3x the tax plus ₹10 lakh per year per asset. It is separate from the Income-tax Act, so a belated return does not cure it; a proactive amended ITR under section 139(8A) within 2 years can correct omissions, and prosecution is possible for wilful non-disclosure.

The #1 trap

Thinking a belated return fixes foreign-asset non-disclosure — the Black Money Act penalties are separate from income tax and are not cured by a belated return. A proactive amended return under section 139(8A) within 2 years of the original due date is the corrective path, but there is no general amnesty right now, and prosecution remains possible for wilful omissions.

Sanjay, ROR who missed disclosing a Singapore bank account

Sanjay, a resident and ordinarily resident individual, held a Singapore savings account with a balance of $80,000, equivalent to ₹66,00,000, during FY 2024-25 but did not disclose it in Schedule FA of his ITR for AY 2025-26. Under the Black Money (Undisclosed Foreign Income and Assets) Act 2015, the undisclosed foreign asset attracts tax at 30% plus a penalty of 3x the tax, which is a total of 120% of the value — ₹79,20,000 on the ₹66,00,000 balance — and separately a penalty of ₹10 lakh per year for each undisclosed foreign asset. The interest the account earned, say ₹1,20,000 a year, is also treated as undisclosed foreign income and taxed at 30%. When Sanjay realises the omission in 2026, he cannot cure it with a belated return, because the Black Money Act operates separately from the Income-tax Act. His corrective path is a proactive amended return under section 139(8A) within 2 years of the original due date, declaring the foreign asset and the income, with interest on the unpaid tax, which substantially reduces the risk of the 3x penalty and ₹10 lakh per asset charge. If he does nothing and the account surfaces in an information-exchange query, prosecution is possible for wilful non-disclosure. His sister, who is an RNOR, holds the same kind of account but is outside the Black Money Act's scope because it covers only residents and ordinarily resident individuals. Sanjay files the amended return promptly and keeps the account statements. A quick call with us dials in the final figure. Sanjay also verifies the Black Money Act's scope on income: undisclosed foreign income is taxed at a flat 30% with no deductions, and the penalty provisions run separately from the income-tax assessment. If the same foreign income was also taxable under the Income-tax Act, the department chooses the higher liability and the credits are not duplicated. The 139(8A) amended return is available only for the assessment year to which the original return relates and only within two years of the original due date, and it requires the tax and interest to be paid before filing. If the omission is discovered in a search or an information-exchange query before he files the amended return, the voluntary-correction benefit is lost. A quick call with us dials in the final figure.