The Black Money Act Just Got Less Scary for Returning NRIs.

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, usually just called the Black Money Act, has been one of the scariest pieces of Indian tax legislation for returning NRIs. Penalty up to three times the tax. Flat 30% tax on undisclosed foreign assets. Criminal prosecution for wilful non-disclosure.

Section 42 of the Act deals with penalty for non-disclosure of foreign assets in the Indian income tax return. For years, the administrative threshold for triggering Section 43 penalty was ₹5 lakh of movable foreign assets.

From 1 October 2024, the Finance (No. 2) Act 2024 amendment to BMA Sections 42/43 raised the threshold for movable foreign assets from ₹5 lakh to **₹20 lakh** (further CBDT Aug 2025 instructions extended prosecution immunity in line). If your total movable foreign assets (bank balances, brokerage accounts, small investments, retirement accounts below threshold) don't exceed ₹20 lakh, Section 42 penalty proceedings don't get triggered.

Immovable foreign property is NOT covered, if you own a house in Dubai or a flat in London, that still has to be disclosed in Schedule FA regardless of value.

**Returning NRIs.** If you're moving back to India after years abroad and you have a Singapore bank account with S$20,000, a US 401(k) with $15,000, and a UK pension with £8,000, total under ₹20 lakh, you don't have to live in fear of a Section 42 penalty for missing a Schedule FA disclosure.

**RNORs with small overseas accounts.** Resident but Not Ordinarily Resident (RNOR) status is a transitional tax bucket for returning NRIs. During your RNOR years, your foreign income generally isn't taxed in India, AND Schedule FA disclosure does not apply (Schedule FA is ROR-only — RNORs and NRIs are exempt under the ITR-2 instructions). The ₹20 lakh safe harbour gives RNORs breathing room on the small stuff.

**Forgetful ex-NRIs.** People who moved back 5 Assessment Years (CBDT Circular 11/2024) ago, never disclosed a small overseas account they forgot about, and have been anxious ever since. If the total movable foreign assets are under ₹20 lakh, the Section 43 exposure is now administratively off the table.

**It's not an amnesty.** The Black Money Act itself is unchanged. Large undisclosed foreign assets, wilful concealment, and immovable foreign property are still fully in scope. This is a threshold change, not a free pass.

**Schedule FA disclosure is still required.** Even under ₹20 lakh, the legal requirement to disclose foreign assets in Schedule FA of the ITR stands. The change is to penalty triggering, not to disclosure obligation. Disclose everything, even small accounts. The cost of disclosure is zero. The cost of getting caught not disclosing is enormous.

**If you've already been issued a notice under Section 42:** The change doesn't automatically cancel the notice. You'd need to raise the amended threshold in your reply and argue for withdrawal based on the new CBDT instruction. Get a specialist involved, this isn't DIY.

**Criminal prosecution provisions are untouched.** For large or wilful cases, prosecution under Section 50-51 of the Act remains available to the department.

**Do the math before you move.** Before you're classified as "Resident" under Indian tax law, work out exactly what foreign assets you hold and what their total value is. Consolidate small accounts. Close dormant ones. Know your numbers.

**Plan for Schedule FA.** In your first Indian ITR as a Resident & Ordinarily Resident (ROR), you'll need to disclose (RNOR filers are not required to file Schedule FA) every foreign bank account, every brokerage holding, every pension account, every insurance policy with cash value. Start the list now, it's easier to build before you move than to reconstruct later.

**Talk to a CA who actually handles returning NRIs.** Most Indian CAs have never done a Schedule FA for a client with 10 US accounts and a UK pension. Find one who has. The wrong filing can cost you a Section 42 penalty even with the new ₹20 lakh threshold if you disclose incorrectly.