CBDT amends Instruction: No Prosecution Under Black Money Act where Penalty Provisions do not Apply [Read Instruction]
CBDT clarified that no prosecution will be launched under the Black Money Act if penalty provisions do not apply, giving relief for foreign assets up to Rs. 20 lakh (excluding immovable property)
Black Money Act where Penalty Provisions
Black Money Act where Penalty Provisions
The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, issued Instruction No. 01/2025 on 18th August 2025. This new instruction changes its earlier guidelines about when prosecution can be started under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, commonly known as the Black Money Act.
The Black Money Act was made in 2015 to deal strictly with people who hide their foreign income or assets from the government. Under this law, there are two kinds of punishments: one is a penalty (a financial fine), and the other is prosecution (criminal proceedings, which may even lead to jail).
Back in March 2022, CBDT had said that if no penalty is imposed under the Black Money Act, then prosecution should also not be started. This was meant to help in small or genuine cases, such as when someone forgot to report a small foreign bank account.
In 2024, the government made an important change through the Finance (No. 2) Act. Earlier, the law said that no penalty would apply only if a person had small foreign bank accounts up to ₹5 lakh in total. After the amendment, this relief was widened. Now, if a person’s total undisclosed foreign assets (other than immovable property like land or houses) are worth ₹20 lakh or less in one financial year, no penalty will be charged.
Because of this change in law, CBDT has updated its instruction in 2025. The new direction clearly says: if penalty is not imposed or is not applicable under Sections 42 and 43 of the Black Money Act, then prosecution under Sections 49 and 50 will also not be started.
In simple terms, this means that people with small foreign holdings up to ₹20 lakh (excluding immovable property) will not face penalty or prosecution under the Black Money Act.
This amendment gives relief to genuine taxpayers who may make small mistakes and keep strong action in place for bigger cases of black money.
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