Lok Sabha Question No. 2571 (UNSTARRED), answered on 2017-03-17
Subject: Checking Black Money
Ministry: FINANCE
Asked by: CHANDU LAL SAHU

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO.2571

TO BE ANSWERED ON FRIDAY, THE 17 TH  MARCH, 2017

PHALGUNA 26, 1938 (SAKA)

## CHECKING BLACK MONEY

2571: SHRI CHANDU LAL SAHU:

## Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  Government  has  taken  note  of  the  remarks  of  former  RBI  Governor  that demonetisation cannot be a stand-alone measure to check black money;
- (b) if so, the reaction of the Government in this regard;
- (c) whether the Government proposes to introduce further tax reforms to have a complete crack on black money and if so, the details thereof;
- (d) the quantum of black money that has been recovered after demonetisation; and
- (e) the steps taken to check the black money during the last three years and the current year?

## ANSWER MINISTER OF STATE FOR FINANCE (SHRI SANTOSH KUMAR GANGWAR)

- (a) & (b): Some media reports published in February, 2017 have quoted former RBI Governor Shri C.Rangarajan, as saying 'Demonetisation cannot be a "standalone measure" to check black money as others  like  tax  and  electoral  reforms  are  needed  to  tackle  this  menace'.  It  is  a  stated  stand  of  the Government  that  action  against  black  money  is  an  on-going  process  and  demonetisation  was  one amongst a series of measures that have been taken by the Government in recent years inter alia to check black money.
- (c):    Bringing  in  tax  reforms  to  check  black  money  is  an  on-going  process.  The  Government  has introduced various additional tax related proposals to curb black money in Finance Bill 2017, which include restriction  of  cash  transaction  of  Rs.  3  lakh  or  more,  non-deduction  under  section  80G  of Income-tax Act, 1961 if  cash donation exceeds Rs. 2000, restriction of donations of Rs.2000 or more to  political  parties  otherwise  than  by  a  bank  account  or  through  electoral  bonds,  widening  of  the scope  of  taxability  of  receipt  of  the  sum  of  money  or  the  property  by  any  person  without consideration or for inadequate consideration in excess of Rs. 50,000 and deeming of prescribing fair market value as full  value of consideration   for  computation of capital  gains in  case of  transfer  of shares other than quoted  shares.

(d):  The  Income-tax  Department  conducted  more  than  1100  enforcement  actions  (searches  and surveys)  and  issued  more  than  5100  notices  during  about  2  months  (Mid-November  2016  to  10 th January 2017) for verification of suspicious transactions of high value cash deposits. These actions led  to  seizure  of  valuables  of  more  than  Rs  610  crore  which  includes  cash  of  Rs.  513  crore  and admission of undisclosed income of more than Rs. 5400 crore. Detection of black money and taking necessary actions as per provisions of the Income-tax Act, 1961 is an on-going process.

(e):  The Government has taken various steps, both by way of policy initiatives as well as through more effective enforcement actions on the ground to check black money. These include putting in place  robust  legislative  and  administrative  frame  works,  systems  and  processes  with  due  focus  on capacity building and integration of information and its mining through increasing use of information technology. Some of  the  recent  measures  are  -  (i)  Constitution  of  the  Special  Investigation  Team (SIT) on Black Money under Chairmanship and Vice-Chairmanship of two former Judges of Hon'ble Supreme Court, (ii) Enactment of a comprehensive law - 'The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015' to specifically deal with black money stashed away  abroad,  (iii)  Constitution  of    Multi-Agency  Group  (MAG)  consisting  of  officers  of  Central Board of  Direct  Taxes  (CBDT),  Reserve  Bank  of  India  (RBI),  Enforcement  Directorate  (ED)  and Financial Intelligence Unit (FIU) for investigation of recent revelations in Panama paper leaks, (iv) Proactively engaging with foreign governments with a view to facilitate and enhance the exchange of information  under  Double  Taxation  Avoidance  Agreements  (DTAAs)/Tax  Information  Exchange Agreements (TIEAs)/Multilateral Conventions, (v) Proactively furthering global efforts to combat tax evasion/black  money,  inter  alia,  by  joining  the  Multilateral  Competent  Authority  Agreement  in respect of Automatic Exchange of Information (AEOI) and having information sharing arrangement with USA under its Foreign Account Tax Compliance Act (FATCA), (vi) Renegotiation of DTAAs with other countries to bring the Article on Exchange of Information to International Standards and expanding  India's  treaty  network  by  signing  new  DTAAs  and  TIEAs  with  many  jurisdictions  to facilitate  the  exchange  of  information  and  to  bring  transparency,  (vii)    Enabling  attachment  and confiscation of property equivalent in value held within the country  where the property/proceeds of crime is  taken  or  held  outside  the  country  by  amending  the  Prevention  of  Money-laundering  Act, 2002  through  the  Finance  Act,  2015,  (viii)  Enactment  of  the  Benami  Transactions  (Prohibition) Amendment Act, 2016 to amend the Benami Transactions (Prohibition) Act, 1988 with a view to, inter alia, enable confiscation of Benami property and prosecution of benamidar and the beneficial owner, (ix) Initiation of the information technology based 'Project Insight' for strengthening the nonintrusive,  information  driven  approach  for  improving  tax  compliance,  and  (x)  Launching  of 'Operation Clean Money' on 31st January 2017 for collection, collation and analysis of information on cash transactions during demonetisation period, extensive use of information technology and data analytics  tools  for  identification  of  high  risk  cases,  expeditious  e-verification  of  suspect  cases  and enforcement actions in appropriate cases which include searches, surveys, enquiries, assessment of income, levy of taxes, penalties, etc. and filing of prosecution complaints in criminal courts, wherever applicable.

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