S. Siddharth Sriram

Introduction The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (‘Act’) received the assent of the President on 26 May 2015 and Section 1(3) of the Act provides 1 April 2016 as the commencement date unless otherwise provided in the Act. The said Act was introduced to tackle the issue of undisclosed foreign income and assets held by Indian residents.

The issue of shares by a company and its subscription by a shareholder is ordinarily on capital account, from the perspective of the company as well as the shareholder. No income can arise on issuance of shares by a company. This principle was relied upon by a few denigrates to launder ill-gotten monies into formal commerce. To avoid this, the Legislature sought to treat monies received by a company on issuance of its shares, as resulting in income in the hands of the company.

The issue of shares by a company and its subscription by a shareholder is ordinarily on capital account, from the perspective of the company as well as the shareholder. No income can arise on issuance of shares by a company. This principle was relied upon by a few denigrates to launder ill-gotten monies into formal commerce. To avoid this, the Legislature sought to treat monies received by a company on issuance of its shares, as resulting in income in the hands of the company.