Lok Sabha Question No. 3350 (UNSTARRED), answered on 2016-08-05
Subject: Sharing Information on FDI
Ministry: FINANCE
Asked by: AJAY (TENI) MISRA

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION No.3350

TO BE ANSWERED ON FRIDAY, THE 5 TH  AUGUST, 2016

SHRAVANA 14, 1938 (SAKA)

## SHARING INFORMATION ON FDI

## 3350. SHRI AJAY MISRA TENI:

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

- (a) the  strategies  adopted  to  check  entry  of  black  money  in  the  country  from  tax  haven countries;
- (b) whether  the  Government  of  India/Reserve  Bank  of  India  (RBI)  share  the  information regarding  Foreign  Direct  Investment  (FDI)  with  the  intelligence  agencies  and  if  so,  the  details thereof along with the reasons therefor;
- (c) whether the Government is capable of taking action against the persons and institutions who are funding the companies with black money through FDI; and
- (d) if so, the details thereof and if not, the reaction of the Government thereto ?

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

- (a): The Government has taken several effective measures, both by way of policy-level initiatives as  well  as  through  more  effective  enforcement  action  on  the  ground,  to  address  the  issue  of  black money,  including  entry  of  black  money  in  the  country  from  tax  haven  countries.  These  measures 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. Recent such major initiatives of the Government include - (i) Constitution of the Special Investigation Team  (SIT) on Black Money  under  Chairmanship  and ViceChairmanship of two former Judges of Hon'ble Supreme Court, (ii) Enactment of a comprehensive new  law  on  black  money  -  'The  Black  Money  (Undisclosed  Foreign  Income  and  Assets)  and Imposition of Tax Act, 2015' to specifically and more effectively tackle 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) 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, (x) Legislative measures including amendments in the Income-tax Act, 1961.

(b): The information and data on FDI received by Indian companies is received and maintained by RBI. This data is furnished to the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry of the Government of India on a monthly basis. DIPP processes this data and hosts  it  on  its  website  after  applying  certain  parameters.  Besides,  there  is  need  based  sharing  of information and data on FDI with law enforcement agencies.

(c) and (d):  Know your customer (KYC) details of the investor are obtained and maintained by the RBI.  Further,  whenever  any  specific  case  involving  funding  with  black  money  through  FDI  is noticed,  appropriate  action  is  taken  by  relevant  law  enforcement  agencies  such  as  Income  Tax Department,  Enforcement  Directorate,  depending  upon  facts  of  the  case.  Such  appropriate  action under direct taxes laws includes investigation, assessment of income, levy of tax, interest & penalty and filing of prosecution complaints before Criminal Courts, wherever applicable.

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