The design distinguishes concealment from oversight, and that distinction is the whole point of the scheme. Category 1 addresses money that genuinely escaped tax, and prices it at an effective 60%. Category 2 addresses a different population — former study-abroad students who kept a foreign bank account open, young professionals and multinational employees holding employee stock option plans, and non-residents who returned to India — whose assets were bought out of income that had already been taxed, or acquired while they were outside the Indian tax net, but who simply failed to report them in the foreign asset schedule of their return. For that group the exposure under the Black Money Act was disproportionate to the lapse, and the scheme lets them regularise for a flat ₹1 lakh.

India now receives foreign financial account information automatically, under the Common Reporting Standard and under FATCA arrangements with the United States. That has changed the arithmetic of non-disclosure: the tax administration increasingly knows about accounts before the taxpayer reports them, and a great many of the mismatches it finds are small and inadvertent rather than evasive. Prosecuting those under a statute designed for large-scale concealment consumes enforcement capacity for very little revenue. A time-bound, priced disclosure window is the standard response — the Income Declaration Scheme of 2016 followed the same logic for domestic undisclosed income — and it is deliberately made expensive enough that it is not cheaper than complying in the first place.