s.2(2), BMA 2015 — Who is an assessee under the Black Money Act

Currently operative

Substituted by the Finance (No. 2) Act 2019 with retrospective effect from 1 July 2015. The original definition reached only a resident and ordinarily resident; free reproductions of the bare Act frequently still serve that superseded text.

Income-tax Act, 1961

s.2(2), BMA 2015

Income-tax Act, 2025

Defined by reference to s.6 of the Income-tax Act, 1961

In force from 1 April 2026, but s.536(2)(c) preserves the 1961 Act for tax years beginning before that date.

In short

Section 2(2) of the Black Money Act defines an assessee as a person who is either resident in India within the meaning of section 6 of the Income-tax Act in the previous year, or who is non-resident or not ordinarily resident in the previous year but was resident in India either in the previous year to which the income referred to in section 4 relates or in the previous year in which the undisclosed asset located outside India was acquired. A proviso directs that the previous year of acquisition is to be determined without giving effect to section 72(c), so the deeming fiction cannot be used to manufacture a year of acquisition and, through it, residence. Nationality is irrelevant throughout: a foreign citizen who is resident in India is an assessee, and an Indian citizen who is non-resident is not unless the second limb catches him. A person outside section 2(2) cannot be assessed under the Act at all, and a notice issued to such a person is without jurisdiction, taking the assessment and any penalty with it.

What the provision does

Determines who the Act reaches, by reference to residential status under the Income-tax Act in specified years, and so fixes jurisdiction over the person.

Threshold questions

Was the person resident in India in the previous year of charge
If not, was he resident in the year the section 4 income relates to, or in the year the asset was acquired
Has the year of acquisition been identified without applying section 72(c), as the proviso requires
Has residential status been tested year by year rather than assumed from an Indian address or a family connection
Do sections 42 and 43, which still use the pre-2019 formula, reach this person on their own terms

The recurring disputes.

The superseded definition is still being applied

As enacted, section 2(2) reached only a resident other than not ordinarily resident. The 2019 substitution widened it and changed the structure. Both versions circulate, and they produce different answers for precisely the population most likely to hold foreign assets. Any reproduction relied on should be checked for the 2019 substitution.

Which year residence is tested in

Limb (b) is anchored by the proviso, which switches section 72(c) off for identifying the year of acquisition. Limb (a) tests residence in the previous year, and for an undisclosed foreign asset that previous year is itself fixed by the proviso to section 3(1) or by section 72(c). So the fiction is excluded from one limb and potentially decisive in the other, which is unresolved on authority.

Asymmetry with the penalty sections

Sections 42 and 43 still apply to a resident other than not ordinarily resident within the meaning of section 6(6). The 2019 amendment widened section 2(2) but left them untouched, so a person who is an assessee under limb (b) may fall outside those penalty sections on their own words.

Frequently asked.

Does the Black Money Act apply to a foreign citizen?

It can. Section 2(2) works entirely through residential status under section 6 of the Income-tax Act, and says nothing about nationality or citizenship. A foreign passport holder who is resident in India in the relevant previous year is an assessee. Equally, an Indian citizen who is non-resident is outside the Act unless he was resident in the year the income arose or the year the asset was acquired. Assessments framed on foreign nationals on the unstated footing that an Indian address or marriage to a resident supplies the status are open to challenge.

Can a not ordinarily resident be assessed under the Black Money Act?

Only within limb (b), that is, where he was resident in India either in the year to which the section 4 income relates or in the year the undisclosed foreign asset was acquired, with that year identified without applying section 72(c). The Kolkata Bench in Vijendra Kedia, BMA Nos. 5 and 6/KOL/2025, decided 12 January 2026, held that an assessee who was not ordinarily resident in the relevant year was not covered by section 2(2), and quashed the notice, the assessment and the penalty together for want of jurisdiction over the person.