Black money act - urgent please !!!!!

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2015 one of our client is us citizen as well as indian resident since 2005. he holds 401k pension account which is tax free in abroad. he also invested in some other mutual funds (joint account with his wife) and has capital gains all are credited to bank account. he gets salary in india as well as foreign. he has not disclose any of the foreign income.

Please suggest me based on above facts with reference to black money act what are the income he need to disclose and pay tax

Querist : Anonymous

Querist : Anonymous (Querist)

10 September 2015 Can any one please answer my query as i was searching since one week

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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18 July 2024 Based on the information provided, here are the key points to consider regarding the client's tax obligations in India, especially in relation to foreign income and investments:

1. **Residential Status:**
- The client is an Indian resident since 2005. Under Indian tax laws, residents are taxed on their global income, which includes income earned both in India and abroad.

2. **401k Pension Account:**
- The 401k pension account, which is tax-free in the US, needs to be disclosed in the client's Indian tax return. Even though it may be tax-free in the US, it is considered part of the client's global income for Indian tax purposes.

3. **Mutual Funds and Capital Gains:**
- Any income from mutual funds held jointly with his wife, including capital gains, needs to be included in the client's Indian tax return. This income is taxable in India, regardless of whether it was credited to a bank account in India or abroad.

4. **Foreign Salary:**
- Income received as salary from abroad (foreign salary) should also be disclosed in the client's Indian tax return. This income is taxable in India if the client qualifies as a resident and is liable to tax on his global income.

5. **Disclosure Requirements:**
- As per Indian tax laws, the client is required to disclose all sources of income, including foreign income, in his Indian tax return. This includes income from salary, pension, investments such as mutual funds, and any other sources of income earned both in India and abroad.

6. **Taxation and Compliance:**
- The client should ensure that all income, whether earned in India or abroad, is correctly reported and taxed in accordance with Indian tax laws.
- Failure to disclose foreign income and assets can lead to penalties and legal consequences under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

### Summary:

Given the client's status as an Indian resident and the global taxation principle followed in India, he is required to disclose and pay tax on all income earned worldwide, including from his US 401k pension account, mutual funds, capital gains, and foreign salary. It is advisable for the client to consult with a qualified tax advisor who can provide personalized guidance based on his specific circumstances and ensure compliance with Indian tax laws, including the requirements under the Black Money Act.

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