Lok Sabha Question No. 89 (STARRED), answered on 2016-07-22
Subject: Black Money
Ministry: FINANCE
Asked by: BRIJBHUSHAN SHARAN SINGH, MD. BADARIDDOZA KHAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA STARRED QUESTION No.†*89

TO BE ANSWERED ON FRIDAY, THE 22 ND  JULY, 2016

ASHADHA 31, 1938 (SAKA)

## BLACK MONEY

## †*89.  SHRI BRIJBHUSHAN SHARAN SINGH: SHRI MD. BADARUDDOZA KHAN:

## 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) the steps taken by the Government so far to unearth the black money and the outcome thereof;
- (c) whether the Government has introduced a new scheme in the budget 2016-17 to tackle the menace of black money in the country; and
- (d) if so, the details and outcome thereof?

## 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.  †*89,  RAISED  BY  SHRI  BRIJBHUSHAN  SHARAN  SINGH  AND  SHRI  MD. BADARUDDOZA KHAN, HON'BLE MEMBERS OF PARLIAMENT, FOR REPLY ON 22 ND  JULY, 2016

There is no official estimation of the amount of black money stashed away abroad. Various nongovernmental  organizations  and  economists  in  the  past  have  indicated  certain  estimations  of 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,  which  lacked unanimity and reliability.

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  and  the  same  is  expected  to  be  completed  within  next  few weeks.

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  appropriate  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)  Recognizing  various  limitations  under  the  existing  legislation [Income-tax  Act,  1961,  etc.],  enactment  of  a  comprehensive  new  law  -  '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 coordinated investigation into recent revelations in Panama  paper  leaks,  (iv) Proactively  engaging  with  foreign  governments  with  a  view  to  facilitate  and  enhance  the exchange of information under Tax Treaties, (v) Renegotiation of existing tax treaties with other countries  to  bring  the  Article  on  Exchange  of  Information  to  International  Standards  and expanding India's treaty network by signing new Tax Treaties,  (vi) Proactively furthering global efforts  for  Automatic  Exchange  of  Information  (AEOI)  and  Common  Reporting  Standards (CRS), inter  alia ,  by  joining  the  Multilateral  Competent  Authority  Agreement  and  having information  sharing  arrangement  with  USA  under  its  Foreign  Account  Tax  Compliance  Act (FATCA), (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) 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, (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) Other legislative measures including amendments in the Income-tax Act, (xi) According high priority  to  the  cases  involving  black  money  stashed  away  abroad  for  investigation  and  other follow-up  actions  including  prosecutions  in  appropriate  cases,  (xii)  While  focusing  upon  nonintrusive measures, due emphasis on enforcement measures in high impact cases with a view to detect  undisclosed  income  and  prosecute  the  offenders  at  the  earliest  for  credible  deterrence against tax evasion/black money.

As part of enforcement measures, the Income Tax Department conducted searches in 990 groups of assessees during last 2 years (F.Ys. 2014-15 and 2015-16), seizing undisclosed assets worth Rs.1,474 Crore. These assessees admitted undisclosed income of Rs.21,354 Crore. During the same period, 9,457 surveys conducted resulted in detection of undisclosed income of Rs.22,475 Crore. Further, there has been significant rise in criminal prosecutions filed by the Income Tax Department in last 2  years and number of cases where prosecution complaints were filed and offences were compounded during F.Ys. 2014-15 and 2015-16 is 3,140 as against 1,690 during F.Ys. 2012-13 and 2013-14.

These measures have equipped the Government better in curbing the menace of black money. 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.

'The Income Declaration Scheme, 2016' (the scheme) has been introduced vide the Finance Act 2016, with effect from 1 st June 2016. The scheme provides for an opportunity to all the persons who have not paid full taxes in the past to come forward and declare the undisclosed income and pay  tax,  surcharge  and  penalty,  totaling  to  forty-five  per  cent  of  such  undisclosed  income declared. The scheme is open for declarations up-to 30 th September 2016.

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