Photo of Kunal Savani

Director in the Tax & Private Client Practice at the Mumbai office of Cyril Amarchand Mangaldas. Kunal specialises in various aspects of direct tax, such as corporate tax, M & A transactions, international tax and also specialises in succession and estate planning. He can be reached at kunal.savani@cyrilshroff.com

 India’s Finance Act 2020, COVID–19 & HNIs - An Update

The Finance Bill, 2020 (“Bill”) was presented as the Union Budget on February 1, 2020 (“Budget”) and then introduced in the Lower House of Parliament (Lok Sabha) – it was finally passed on March 23, 2020 with certain key amendments (“Amendment”). Interestingly, this was passed without any discussions in Parliament and received the presidential assent on March 27. Accordingly, the same will come into effect from April 1, 2020 (“Finance Act”).

The Finance Act needs to be seen in light of the ongoing COVID-19 pandemic being played out in India. As India undergoes a 21-day lockdown, post passing of the Amendment, the government is undertaking pro-active measures by way of press conferences to address the pressing needs of the society. To begin with, the government announced an extension of various statutory compliances for taxpayers (discussed below). Next, the Finance Minister (“FM”) announced a COVID-19 relief package for the poor, which primarily covers food security and direct cash transfers to them. Lastly, on March 27, Reserve Bank of India (“RBI”) Governor, Shaktikanta Das slashed the key lending rate by 75 basis points in an emergency move, to counter the economic fallout of the said lockdown. The RBI also permitted all commercial banks and lending institutions to allow a 3-month moratorium on loans. “Banks should do all they can to keep credit flowing,” Mr Das said.
Continue Reading

Prosecution under Black Money Act for inherited foreign bank accounts

The scourge of ‘black money’ has been a persistent issue for India, becoming a major political issue in the recent past. The problem of black money leads to challenges on multiple fronts, greatest of them being denial of revenue to the Government. The parallel economy created by black money deprives the government of its due share of individual income tax, which in turn leads to reduced funds available for much needed government spending and stimulus. Socially, the problem of black money gives rise to further corruption and enhanced class inequality.

Since coming to power in 2014, the current Government has taken up the issue of black money as a major point of reform and has been gradually escalating its efforts to bring black money, both in India and abroad, to tax. Some of the major measures include establishing the multilateral mechanism for Automatic Exchange of Information, information exchange mechanisms with various countries under the respective tax treaties, the demonetisation drive, enactment of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BM Act) and the Fugitive Economic Offenders Act, 2018.
Continue Reading