Here are the latest developments:
The Undisclosed Foreign Income and Assets (Imposition of Tax) bill contains provisions for strict action against those stashing away money abroad - a 300% tax and rigorous imprisonment of 10 years, sources said.
Filing of returns will be mandatory for owners or beneficiaries of foreign assets. Any violation will involve a jail term of 7 years.
The cabinet also cleared the way for the signing of an agreement with the US for automatic exchange of financial account information.
This will enable India to exchange information on black money with other countries or entities that are signatories of the Foreign Account Tax Compliance Act or FATCA.
FATCA is the US federal law that requires US nationals living abroad to report their accounts and foreign financial institutions to report to about their clients.
In his budget speech this year, Finance Minister Arun Jaitley had said the government will draw up a new law to effectively deal with the black money stashed abroad.
"A new structure including e-filing and tracking down is our abiding commitment," Mr Jaitley had said.
In his radio address Mann ki Baat, Prime Minister Narendra Modi had vowed to bring back "every penny of the poor man's money" stashed abroad as untaxed or black money, saying it was "an article of faith" for him.
Last month, the Union government started legal proceedings against 60 people who allegedly have black money stashed away in illegal foreign accounts, sources told NDTV.
The total amount allegedly stashed in these illegal accounts could exceed Rs 1500 crore, they said.
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