Who does the Black Money Act actually apply to?
It reaches residents of India who held foreign assets or received foreign income that was not disclosed in an Indian return. Two things follow from that. Residence for the year is the gateway, so a year in which you were not resident is not a year this regime is asking about. And it is the non-disclosure that engages it, not the existence of a foreign asset: an account properly reported in the return for the year sits outside its scope, however large. The awkward cases are the ones in between, an asset reported in some years and not others, or reported in terms that do not actually identify it.
I forgot to report an old overseas bank account, am I inside this regime?
If you were resident in India in the years concerned and the account was not disclosed in those returns, then the omission falls within this regime rather than within an ordinary correction. That difference matters, because the regime carries its own assessment powers and its own penalty and prosecution provisions, and the ordinary time limits that confine a normal reassessment do not confine it in the same way. It does not follow that the outcome must be severe. It follows that the correction has to be prepared as a disclosure, with the asset, how it was funded and the years involved documented, rather than slipped into a routine amendment.
Does it matter that the foreign account never earned anything?
A dormant account with no income is still an undisclosed foreign asset if it should have been reported and was not. The regime is directed at the asset as much as at the income, which is why the asset schedule in a return is not a formality. In practice the nil-income cases are the ones clients leave longest, on the reasoning that no tax was lost. That reasoning addresses the wrong exposure. The first question an officer asks is what the asset is and how it was funded, and a long gap makes that harder to answer rather than easier, because the records that answer it are the first to disappear.
Are non-residents or recent immigrants covered by these disclosures?
Residence for the year decides it. Somebody who was not resident in India in a year is not being asked to disclose foreign assets for that year, and a newly arrived resident's earlier holdings sit outside the years before residence began. Where people come unstuck is the transition. The first year of residence brings the existing foreign position into the reporting frame, including assets acquired long beforehand, and that is the year most often filed as though nothing had changed. Establishing the residence position year by year, on the facts, is the first piece of work rather than the last.
What does a disclosure under this regime have to contain?
Enough to identify each foreign asset, when and how it was acquired, how it was funded, what income it produced and what became of that income, for each year in question. The narrative matters as much as the schedule. An asset listed with no funding trail invites the very question the regime exists to ask, and answering it two years after the disclosure is far harder than answering it inside the disclosure. We assemble the documents first, the account opening papers, the transfers in, the statements and any foreign filings, then write the disclosure from them rather than writing it and going looking for support.
Can I just report the asset in this year's return instead?
Reporting it now is necessary and it is not the same as dealing with the earlier years. A current-year entry tells the department the asset exists without explaining the years it was absent, and the absent years are what this regime is concerned with. The instinct behind the question is sound, start being right, but done on its own it creates a dated record of the omission with nothing beside it. The better sequence is to establish which years were affected, prepare the disclosure for those years with the funding and income history, and bring the current return into line as part of the same exercise.
Who is an NRI for tax purposes?
Residence in India is decided by days present in the tax year, with a second limb that also counts days over the preceding four years, and separate rules for Indian citizens leaving for employment. Fall outside the tests and you are non-resident, taxed in India only on Indian-source income. Between full residence and non-residence sits RNOR — resident but not ordinarily resident — which shelters foreign income for a limited window after returning. See RNOR status.
Is dividend income from Indian shares taxable for an NRI?
Yes. Dividends are taxed in the shareholder's hands, and the paying company withholds on payment to a non-resident. The treaty can reduce that withholding, but only if the documents are with the company before it pays: a tax residency certificate from your country, Form 10F, and a PAN on the register. Without them the domestic rate applies and your route back to the difference is a refund claim on an Indian return. See residency certificates and Form 10F.
