Sections 71-72 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 71 listed the persons and cases to which Chapter VI did not apply, in clauses (a) to (d). Section 72 then declared, for the removal of doubts, three things: that the Chapter gave benefit only to the declarant, what followed where tax and penalty were not paid, and how an undeclared asset acquired before commencement would be treated. The window is closed on the face of the sources, and this article records what the Chapter provided. A reader asking whether an old foreign asset fell in one of the excluded classes can take advice from our legal consultation team.
As per the Act as enacted and published in the Gazette of India on 27 May 2015, Chapter VI did not apply to a person under a detention order of the kind described in clause (a), to prosecution for certain offences, to a person notified under the Special Court Act named in clause (c), and to assets caught by pending income-tax proceedings or information received under a treaty (clause (d)). Section 72 added that the benefits did not pass to others, that an asset whose declaration was not paid for became chargeable under this Act in the year of the declaration, and that an asset acquired before commencement and not declared would be treated as acquired in the year a section 10 notice is issued.
Section 71: where the Chapter did not apply
The marginal note reads "Chapter not to apply to certain persons". The provisions of the Chapter did not apply in four situations. The Acts named are quoted as printed in 2015, and the current law should be checked.
Clause (a): a detention order. To any person in respect of whom an order of detention had been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The clause has four provisos, which keep the exclusion alive only while the order has not been revoked or set aside. In summary, the exclusion applied where the order was one that had not been revoked on the report of the Advisory Board, or before receipt of that report, or on review as the 1974 Act provides, or had not been set aside by a court of competent jurisdiction. The provisos are long and cross-refer to that Act, and the original text should be read for the exact conditions.
Clause (b): prosecutions. In relation to prosecution for any offence punishable under Chapter IX or Chapter XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967 and the Prevention of Corruption Act, 1988.
Clause (c): notified persons. To any person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992.
Clause (d): assets caught by pending proceedings. In relation to any undisclosed asset located outside India acquired from income chargeable to tax under the Income-tax Act for any previous year relevant to an assessment year before the one beginning on the 1st day of April, 2016:
- (i) where a notice under section 142, or sub-section (2) of section 143, or section 148, or section 153A or section 153C of the Income-tax Act has been issued for that assessment year and the proceeding is pending before the Assessing Officer; or
- (ii) where a search has been conducted under section 132, or requisition made under section 132A, or a survey carried out under section 133A of the Income-tax Act in a previous year, and a notice under sub-section (2) of section 143 for the relevant assessment year, or under section 153A or 153C for an assessment year relevant to any earlier previous year, has not been issued and the time for issuing it has not expired; or
- (iii) where any information has been received by the competent authority under an agreement entered into by the Central Government under section 90 or section 90A of the Income-tax Act in respect of the undisclosed asset.
The Explanation to clause (d) says that "for the purpose of this sub-clause asset shall include a bank account whether having any balance or not". Note the drafting: the Explanation refers to "this sub-clause" although it sits under clause (d). It is quoted as printed and not corrected here. It means that a bank account counted as an asset for clause (d) even if it held nothing.
The references to the Income-tax Act are to the Income-tax Act, 1961 as printed in 2015; the corresponding provision of the current income-tax law should be checked.
Section 71 at a glance
| Clause | Excluded (as enacted) |
|---|---|
| (a) | Person under a detention order under the 1974 Act, subject to the four provisos |
| (b) | Prosecution for offences under Chapter IX or XVII of the Indian Penal Code, the Narcotic Drugs and Psychotropic Substances Act, 1985, the Unlawful Activities (Prevention) Act, 1967, the Prevention of Corruption Act, 1988 |
| (c) | Person notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 |
| (d)(i) | Asset for an earlier assessment year where specified notices were issued and the proceeding is pending |
| (d)(ii) | Asset where a search, requisition or survey was carried out and the notice has not yet been issued but the time has not expired |
| (d)(iii) | Asset in respect of which information was received under a treaty agreement of the Central Government |
| (d) Explanation | A bank account counts as an asset whether it has any balance or not |
Section 72: removal of doubts
The marginal note is "Removal of doubts". "For the removal of doubts, it is hereby declared that":
Clause (a): benefit only to the declarant. Save as otherwise expressly provided in the Explanation to sub-section (1) of section 69, nothing in the Chapter shall be construed as conferring any benefit, concession or immunity on any person other than the person making the declaration. The Explanation to section 69(1) deals with partners of a firm that made a declaration; see our article on sections 69 and 70.
Clause (b): declaration made but not paid for. Where a declaration was made under section 59 but no tax and penalty was paid within the time specified "under section 60 and section 61", the value of such asset was chargeable to tax under this Act in the previous year in which the declaration was made. A drafting point: sections 60 and 61 do not themselves specify a time for payment; the time is notified under section 63(1), and section 63(3) treats the declaration as never made if tax was not paid by then. The text is quoted as printed and not corrected here.
Clause (c): assets acquired before commencement and not declared. Where any asset has been acquired or made prior to commencement of the Act, and no declaration in respect of such asset is made under the Chapter, such asset "shall be deemed to have been acquired or made in the year in which a notice under section 10 is issued by the Assessing Officer and the provisions of this Act shall apply accordingly".
Clause (c) looks beyond the window on its own words. It applies to an asset acquired or made before commencement for which no declaration was made, and it fixes the year of acquisition by reference to the year of the section 10 notice. How that fits with the charge in section 3 is for the reader to take advice on; see our articles on section 3 and section 10. The sources do not reconcile the date of commencement (section 1(3) prints 1 April 2016, while the Rules of 2 July 2015 use 1 July 2015 as a valuation date for declared assets), and this article gives no other date.
A worked example (in the past tense)
Rakesh Bhandari, a resident, held an undisclosed foreign account acquired from income chargeable to tax for an earlier assessment year. A notice under section 148 of the Income-tax Act had been issued for that assessment year and the proceeding was pending before the Assessing Officer. Under section 71(d)(i), the Chapter did not apply to that asset, so no declaration was open to him for it. Another person, Sudha Pillai, declared her asset but did not pay the tax and penalty by the notified date. The declaration was deemed never made (section 63(3)), and under section 72(b) the value of the asset became chargeable to tax under this Act in the previous year in which she made the declaration. A third person never declared an asset that was acquired before commencement; under section 72(c) the asset would be treated as acquired in the year of a section 10 notice.
What the printed text leaves open
The Act as enacted does not say how the Assessing Officer is to know whether a detention order was revoked, or how a person was to establish that clause (d) did not apply, before declaring. It does not say what the position was for a person who declared and was later found to be within clause (d). This article does not answer those questions.
References and what to check
The sections are read as enacted and as a record of what the Chapter provided. Later Finance Act amendments should be checked. Other laws named are quoted as printed in 2015; the current law should be checked.
Need help reading the exclusions?
If an old foreign asset might have fallen in one of the excluded classes, or you want to see how section 72 applies to it, our legal consultation team can go through the clauses with you and the documents.
Key takeaways
- Section 71 excluded detention-order cases, prosecutions for listed offences, persons notified under the Special Court Act, and assets caught by pending notices, searches, surveys or treaty information.
- A bank account counted as an asset for clause (d) whether or not it held any balance.
- Section 72(a): the Chapter's benefits went only to the declarant, save the firm-partner Explanation to section 69(1).
- Section 72(b): value of an asset whose tax and penalty was not paid became chargeable under this Act in the year of the declaration.
- Section 72(c): an asset acquired before commencement and not declared was treated as acquired in the year a section 10 notice is issued.
- Check later Finance Act amendments before acting.
Read next
- Section 59: declaration of undisclosed foreign asset
- Sections 60 to 63: tax, penalty, manner and time for the one-time declaration
- Section 10: assessment of undisclosed foreign income and asset
- Black Money Act: undisclosed foreign income
Disclaimer: Based on the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 as enacted and published in the Gazette of India on 27 May 2015, and on the Rules of 2015 as notified on 2 July 2015, as consulted on 2 October 2026. Later Finance Act amendments, amendment rules and the current income-tax law should be checked. This article is general information, not legal advice; check the official text before acting.