Lok Sabha Question No. 140 (STARRED), answered on 2016-03-04
Subject: Black Money
Ministry: FINANCE
Asked by: RAM TAHAL CHOUDHARY, PRATAPRAO GANPATRAO JADHAV

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA STARRED QUESTION No.*140

TO BE ANSWERED ON FRIDAY, THE 4 TH  MARCH, 2016

PHALGUNA 14, 1937 (SAKA)

BLACK MONEY

*140. SHRI RAM TAHAL CHOUDHARY: SHRI PRATAPRAO JADHAV:

Will the Minister of FINANCE be pleased to state:

(a) whether the Government has made an assessment of black money stashed abroad and if so, the details thereof;

- (b)  whether  the  Government  has  obtained  information  of  foreign  accounts  of  Indians having money in foreign banks/countries including bank accounts of Indians from Swiss Confederation;
- (c)  if  so,  the  details  thereof  along  with  the  reaction  of  the  foreign  banks/countries/Swiss Confederation in this regard; and
- (d) the proportion of holding black money in those foreign accounts along with the action taken against the offenders and success achieved so far to bring back the black money?

ANSWER FINANCE MINISTER (SHRI ARUN JAITLEY)

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

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STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO.*140, RAISED BY SHRI RAM TAHAL CHOUDHARY AND SHRI PRATAPRAO JADHAV, HON'BLE MEMBERS  OF  PARLIAMENT, FOR REPLY ON 4 th MARCH,2016

There is  no  official  assessment  of  black  money  stashed  abroad.  Various  non-governmental organizations and economists in the past have indicated widely varying estimations regarding illicit financial flows out of the country. Such estimations appear to be based upon different sets  of  facts,  assumptions,  presumptions,  etc.  leading  to  widely  varying  inferences.  Such estimations also appear to lack unanimity and reliability. The subject matter, therefore, does not appear amenable to reliable estimation.

Receipt of information of foreign accounts of Indians, under the available legal instruments including  Double  Taxation  Avoidance  Agreements  (DTAAs)/Tax  Information  Exchange Agreements  (TIEAs)/Multilateral  Conventions  [tax  treaties],  is  an  on-going  process.  All deposits/money of Indians kept in foreign banks may not necessarily be unaccounted/black money. Whether such deposit/money is unaccounted is subject matter of investigation.

Whenever such information is received, appropriate action is taken under relevant laws. Such action  under  direct  taxes  laws  includes  searches,  surveys,  enquiries,  assessment  of  income, levy of taxes, penalties, etc. and filing of prosecution complaints in criminal courts, wherever applicable. Assessments completed and penalties levied through the quasi-judicial process of law may be subject matter of appeal before various appellate authorities including Hon'ble High Courts and Hon'ble Supreme Court. With a view to specifically and effectively handle the issue of black money stashed abroad, the Government has enacted a new law 'The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015' which has come into effect from 01.07.2015 and, inter alia, provides for more stringent penalties and prosecutions. In light of the above on-going process, investigation, assessment, penal actions, prosecutions, etc. in the cases involving black money stashed abroad are at different stages in different cases.

Information  received  under  the  provisions  of  the  tax  treaties  is  governed,  inter  alia,  by confidentiality  and  usage  clause  in  such  instruments  and  could  be  disclosed  only  to  the prescribed persons/authorities. Further, disclosure of information regarding specific taxpayers is prohibited except as provided under section 138 of the Income-tax Act, 1961.

As  submitted  above,  the  tax,  interest  and  penalties  form  part  of  the  total  liability  of  each assessee and is recovered in accordance with law. There are certain provisions for recovery of the  same  from  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 . Under the newly enacted Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the offence of willful attempt to evade tax, penalty or interest in relation to undisclosed foreign income and assets has been made a scheduled offence for the purposes of 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.