Lok Sabha Question No. 559 (UNSTARRED), answered on 2016-11-18
Subject: Action on Black Money
Ministry: FINANCE
Asked by: SATISH CHANDRA DUBEY, UDAY PRATAP SINGH, KAUSHALENDRA KUMAR, SHARAD TRIPATHI, RAKESH SINGH

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO.†559

TO BE ANSWERED ON FRIDAY, THE 18 TH  NOVEMBER, 2016

KARTIKA 27, 1938 (SAKA)

## ACTION ON BLACK MONEY

†559. SHRI SATISH CHANDRADUBEY: SHRI UDAYPRATAP SINGH: SHRI KAUSHALENDRA KUMAR: SHRI SHARAD TRIPATHI: SHRI RAKESH SINGH

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

- (a) whether the Government has made any assessment about the black money in the country and abroad and if so, the details thereof;
- (b) whether the Government has achieved success in bringing back black money deposited in foreign banks during the last two years and if so, the details thereof;
- (c) whether there is any system in place to monitor the inflow of black money in the country and if so, the details thereof; and
- (d) whether the Government has any plan to identify the persons who have stashed black money in India and abroad, if so, the details thereof along with the number of individual and companies identified under the plan and the steps taken /progress made by the Government so far?

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

(a): There is no official estimation of the amount of black money within the country and stashed abroad. The Government had commissioned a study on the above through National Institute of Public Finance and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM), reports from which have been received. These reports are under consideration of the Government.

(b) to (d): Appropriate action against tax evasion including in respect of unaccounted income stashed in foreign countries, is an on-going process. Such action under direct tax laws includes searches, surveys, enquiries, assessment of income, levy of taxes, penalties, etc. and filing of prosecution complaints in criminal courts, wherever applicable.

Recognizing  various  limitations  under  the existing legislation [Income-tax Act, 1961, etc.], the Government  enacted   'The  Black  Money   (Undisclosed   Foreign   Income   and   Assets) and Imposition of Tax Act, 2015' - to specifically and effectively tackle the issue of black money stashed away abroad. This has, inter alia, provided for more stringent provisions of penalties and prosecutions in respect of black money stashed away abroad. Further, under this law, for the first time   the   offence   of   wilful   attempt   to   evade   tax,   etc.   in   relation   to   undisclosed   foreign income/assets has been made a Scheduled Offence for the purposes of the Prevention of Moneylaundering Act, 2002 (PMLA). This enables attachment and confiscation of the proceeds of crime   of   wilful   attempt   to   evade   such   tax,   etc.,   eventually   leading   to   recovery   of   such undisclosed foreign income and assets/black money stashed away abroad. The new law came into force w.e.f. 01.07.2015.

However, before the cases involving black money stashed away abroad were subjected to more stringent   provisions   of   the   Black   Money   (Undisclosed   Foreign   Income   and   Assets)   and Imposition of Tax Act, 2015, a one-time three months' compliance window closing on 30 th September   2015   was   provided   under   the   new   law   wherein   648   declarations   involving undisclosed foreign assets worth Rs.4164 crore were made. The amount collected by way of tax and penalty in such cases is about Rs.2476 crore.

The  Government   has   taken   several   steps   to   effectively   tackle   the   issue   of   black   money, particularly black money stashed away abroad. Such measures include policy-level initiatives, more effective   enforcement   action   on   the   ground,   putting   in   place   robust   legislative   and administrative frameworks, systems and processes with due focus on capacity building and integration of information and its mining through increasing use of information technology. Recent major initiatives in this regard include - (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' which has come into force w.e.f. 01.07.2015 to specifically and more effectively deal with the issue of 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) According   high   priority   to   the   cases   involving   black   money   stashed   away   abroad   for investigation and other follow-up actions including prosecutions in appropriate cases, (vi) While focusing upon non-intrusive measures, due emphasis on enforcement measures in high impact cases with a view to prosecute the offenders at the earliest for credible deterrence against tax evasion/black money, (vii) 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), (viii) 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, (ix) 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,  (x)  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 provide for prosecution, (xi) Initiation of the information technology based 'Project Insight' by the Income Tax Department for strengthening the non-intrusive information driven approach for improving tax compliance and effective utilization of available information.

These measures have equipped the Government better in curbing the menace of black money stashed away abroad. Further, sustained and prompt action taken by the Income Tax Department in various cases involving black money has resulted into assessment of substantial amounts of undisclosed income, levy of concealment penalty and filing of criminal prosecution complaints for various offences in appropriate cases.

As part of enforcement measures, during the period from 01.04.2014 to 31.10.2016, the Income Tax Department (ITD) conducted searches in 1242 groups of assesses, seizing undisclosed assets worth Rs.2,029 Crore. These assesses admitted undisclosed income of Rs.28,567 Crore. During the same period, 13,690 surveys conducted resulted in detection of undisclosed income of Rs.30,001 Crore. Similarly, during the period from 01.04.2014 to 30.09.2016, the Income Tax Department has filed 1514 prosecution complaints while offences were compounded in 2244 cases and 75 persons have been convicted by the Courts.

Further, under the Income Declaration Scheme, 2016, the Government has received 64,275* declarations disclosing undisclosed income of Rs.65,250 crore*.

*Provisional figures

*******