No action under FEMA against black money declarants: RBI

In a bid to encourage disclosure of undeclared assets held abroad, the Reserve Bank of India today said no action under FEMA will be taken against declarations under one-time compliance window ending on Wednesday.

"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 under the provisions of Black Money Act have been paid," RBI said in a statement.

Also, no permission under FEMA will be required for those wanting to dispose of assets declared and bring back the proceeds through proper banking channel by March 31, it added.

The rules framed under the new law provides for exemption from prosecution under FEMA to those disclosing their assets.

For those wanting to hold the assets after payment of tax and penalty prescribed under the new black money law, will have to apply to the central bank for permission within 180 days of making the declaration.

In case the permission is denied by the RBI, the foreign assets have to be mandatorily disposed and proceeds brought to India, it said.

Under the new stringent black money law, a 90-day one time voluntary compliance window has been provided to foreign assets holders to declare their undisclosed wealth, pay a total of 60 per cent tax and penalty and escape harsh punishment, including jail term.

The compliance window under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ends on September 30.

"No permission under FEMA will be required to dispose of the asset so declared and bring back the proceeds to India through banking channels within 180 days from the date of declaration," RBI said.

For those who wish to hold the assets so declared, the central bank said they may apply to the RBI within 180 days from the date of declaration if such permission is necessary as on date of application.

"The Reserve Bank of India will deal with such applications as per extant regulations. In case such permission is not granted, the asset will have to be disposed of and proceeds brought back to India," it added.