Parliament on Wednesday approved the Undisclosed Foreign Income and Assets Bill providing for heavy penalties for stashing black money away in foreign accounts with the Rajya Sabha passing the measure, two days after the Lok Sabha had done so.

Moving what is called the Black Money Bill for acceptance by the upper house, Finance Minister Arun Jaitley said this law would for the first time levy tax in India on assets kept abroad.

“The bill (introduced in March) has no connection with domestic black money,” Mr. Jaitley said replying to the debate on the bill.

“For the first time, unlawful, undisclosed income abroad has been taxed under this law at a tax rate of 30 per cent with an additional 30 percent penalty on it,” he added.

Explaining that a time-frame will be provided as a “compliance window” for declaring and paying penalty, Mr. Jaitley said that failure to meet the compliance timeline will attract an additional penalty of 90 percent for a total tax liability of 120 percent on the quantum of black money abroad.

The bill provides for rigorous imprisonment of up to 3-10 years for perpetrators.

The finance minister said India was foremost among a large number of countries that were taking interest in the G-20 initiative on automatic transmission of information with regard to monetary transaction.

“If you don’t use the compliance window now time will run out, and by 2017 there will be real—time exchange of information,” Mr. Jaitley told the Rajya Sabha.

“The world is no longer willing to tolerate tax havens working in secrecy,” he added.

At the G20 Brisbane summit last November, leaders endorsed a new global transparency standard by which more than 90 jurisdictions will begin automatic exchange of tax information, using a common reporting standard by 2017-18.

Admitting that there was no official estimation of black money within India or stashed away abroad, Mr. Jaitley told parliament last week that the government was examining the reports of three institutes on the matter.

An unofficial estimate of illegal money stashed away overseas puts it somewhere between $466 billion and $1.4 trillion.