Lok Sabha Question No. 187 (STARRED), answered on 2015-12-11
Subject: Black Money
Ministry: FINANCE
Asked by: MIDHUN REDDY, LAXMI NARAYAN YADAV

## LOK SABHA STARRED QUESTION NO.*187

## To be answered on

## Friday, December 11, 2015 Agrahayana 20, 1937 (Saka)

## Black Money

| Question                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | Answer                                                                                                                   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|
| *187. SHRI P.V. MIDHUN REDDY: SHRI LAXMI NARAYAN YADAV: Will the Minister of FINANCE be pleased to state: (a) whether the Government has made an assessment of black money stashed abroad and its circulation within the country, if so, the details thereof and if not, the reasons therefor along with the reaction of the Government thereto; (b) whether the Government has reviewed the existing machinery in tracing/recovering black money, particularly stashed abroad during the last three years and the current year and if so, the details thereof; (c) the quantum of black money recovered so far; and (d) the corrective steps taken by the Government | To be answered by the Minister of Finance (SHRI ARUN JAITLEY) (a) to (d): A statement is laid on the table of the House. |

## STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO.*187, RAISED BY SHRI P.V. MIDHUN REDDY AND SHRI LAXMI NARAYAN YADAV, HON'BLE MEMBERS OF PARLIAMENT, FOR REPLY ON 11 th  DECEMBER, 2015

There is no official estimation regarding the amount of black money within the country and stashed abroad. However, the Government had commissioned a study, inter alia , on estimation of unaccounted income and wealth inside and outside the country, through National  Institute  of  Public  Finance  and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM). Reports received from these Institutes are under examination of the Government.

Periodic review of the  Government's machinery, handling investigations and other follow-up actions in the cases involving black money, is an on-going process. In recent times, the Government has  taken  several  steps,  both  by  way  of  policy-level  initiatives  as  well  as  through  more  effective enforcement action on the ground, to tackle the issue of black money, particularly black money stashed away abroad, more effectively. These steps include 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. Major initiatives taken by the Government 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  new  law  titled  'The  Black  Money  (Undisclosed  Foreign Income and Assets) and Imposition of Tax Act, 2015' to specifically and more effectively deal with the issue  of  black  money  stashed  away  abroad  which  has  come  into  force  w.e.f.  01.07.2015,  (iii) Introduction  of  the  Benami  Transactions  (Prohibition)  Amendment  Bill,  2015  to  amend  the  Benami Transactions (Prohibition) Act, 1988 with a view to, inter alia, enable confiscation of Benami property and  provide  for  prosecution,  (iv)  Proactively  engaging  with  foreign  governments  for  enhanced 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, (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  possible  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  and  having  information  sharing  arrangement  with  USA  under  its  Foreign Account Tax Compliance Act (FATCA).

Appropriate action against evasion of taxes/black money 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. Such taxes, penalties, etc. form part of the total tax liability of each assessee and is recovered in accordance with law. Such liability is also recovered from assets seized during the searches conducted by the Income Tax Department. There  are also  provisions  for  recovery  of  the  same  from  the  assets  kept  abroad  in accordance  with  legal  instruments  with  the  foreign  jurisdictions  concerned.  As  per  scheme  of  the Income-tax  Act,  1961,  only  the  demand/liability  raised  in  relation  to  the  total  income  assessed  is recoverable and not the undisclosed income/black money per-se .  However, the newly enacted Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, has included the offence  of  willful  attempt  to  evade  tax  etc.  in  relation  to  undisclosed  foreign  income  and  assets  a Scheduled  Offence  under  the  Prevention  of  Money-laundering  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 abroad. Further, where property/proceeds of crime is taken or held outside the country, PMLA has been amended through the Finance Act, 2015 enabling attachment and confiscation of property equivalent in value held within the country.

*****

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA STARRED QUESTION No. *187

TO BE ANSWERED ON FRIDAY, THE 11 TH  DECEMBER, 2015

AGRAHAYANA 20, 1937 (SAKA)

BLACK MONEY

*187. SHRI P.V. MIDHUN REDDY: SHRI LAXMI NARAYAN YADAV:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  Government  has  made  an  assessment  of  black  money  stashed  abroad  and  its circulation within the country, if so, the details thereof and if not, the reasons therefor along with the reaction of the Government thereto;
- (b) whether the Government has reviewed the existing machinery in tracing/recovering black money, particularly  stashed  abroad  during the last three years and the  current year and if so, the details thereof;
- (c) the quantum of black money recovered so far; and
- (d) the corrective steps taken by the Government in this regard?

ANSWER FINANCE MINISTER (SHRI ARUN JAITLEY)

- (a) to (d): A statement is laid on the table of the House.

*******

## STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO.*187, RAISED BY SHRI P.V. MIDHUN REDDY AND SHRI LAXMI NARAYAN YADAV, HON'BLE MEMBERS OF PARLIAMENT, FOR REPLY ON 11 th  DECEMBER, 2015

There is no official estimation regarding the amount of black money within the country and stashed abroad. However, the Government had commissioned a study, inter alia , on estimation of unaccounted income and wealth inside and outside the country, through  National  Institute  of  Public  Finance  and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM). Reports received from these Institutes are under examination of the Government.

Periodic review of the Government's machinery, handling investigations and other follow-up actions in the cases involving black money, is an on-going process. In recent times, the Government has taken several  steps,  both  by  way  of  policy-level  initiatives  as  well  as  through  more  effective  enforcement action  on  the  ground,  to  tackle  the  issue  of  black  money,  particularly  black  money  stashed  away abroad,  more  effectively.  These  steps  include  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.  Major  initiatives  taken  by  the Government 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 new law titled 'The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015' to specifically and more effectively deal with the issue of black money stashed away abroad which has come into force w.e.f. 01.07.2015, (iii) Introduction of the Benami  Transactions  (Prohibition)  Amendment  Bill,  2015  to  amend  the  Benami  Transactions (Prohibition) Act, 1988 with a view to, inter alia, enable confiscation of Benami property and provide for  prosecution,  (iv)  Proactively  engaging  with  foreign  governments  for  enhanced  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, (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 possible 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  and having  information  sharing  arrangement  with  USA  under  its  Foreign  Account  Tax  Compliance  Act (FATCA).

Appropriate action against evasion of taxes/black money 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. Such taxes, penalties, etc. form part of the total tax liability of each assessee and is recovered in accordance with law. Such liability is also recovered from assets seized during the searches conducted by the Income Tax Department. There  are  also  provisions  for  recovery  of  the  same  from  the  assets  kept  abroad  in accordance  with  legal  instruments  with  the  foreign  jurisdictions  concerned.  As  per  scheme  of  the Income-tax  Act,  1961,  only  the  demand/liability  raised  in  relation  to  the  total  income  assessed  is recoverable and not the undisclosed income/black money per-se .  However, the newly enacted Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, has included the offence  of  willful  attempt  to  evade  tax  etc.  in  relation  to  undisclosed  foreign  income  and  assets  a Scheduled  Offence  under  the  Prevention  of  Money-laundering  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 abroad. Further, where property/proceeds of crime is taken or held outside the country, PMLA has been amended through the Finance Act, 2015 enabling attachment and confiscation of property equivalent in value held within the country.

*****