As published on bizzbuzz.news, Thursday 16 February, 2023.
FIU-India is a member of the 167-member Egmont Group, an international organisation for exchange of information and cooperation amongst Financial Intelligence Units (FIUs). As members of Egmont Group, FIUs are free to exchange information on real time basis through a highly secured network – Egmont Secured Web (ESW) – on various matters as per their roles and functions
The word ‘black money’ per se is not defined under the Income Tax Act, 1961, Customs Act, 1962, CGST Act, 2017, Central Excise Act, 1944 and erstwhile Chapter V of Finance Act, 2017 (related to Service Tax). This was stated by Union Minister of State for Finance, Pankaj Chaudhary in a written reply to a question in Lok Sabha on February 13.
A total of 648 disclosures involving undisclosed foreign assets worth Rs 4,164 crore were made in the one-time three months compliance window, under BMA, 2015, which closed on September 30, 2015.
The amount collected by way of tax and penalty in such cases was around Rs 2,476 crore.
As on November 30, 2022, assessments under BMA, 2015 have been completed in 394 cases, raising the tax demand of over Rs. 15,570 crore. Further, 125 prosecution complaints have been filed under the provisions of BMA, 2015. The State/UT-wise details are not maintained separately.
As far as Income Tax Department (ITD) is concerned, the Minister stated, whenever any credible information of ‘direct-tax’ evasion comes to its notice, it takes suitable action(s), including the search & seizure operations, to bring to tax, all undisclosed income.
Talking to Bizz Buzz, Abhishek Aneja, a New Delhi-based income tax expert, says, “Black money is a sensitive issue that our country faces. Post-2014, the Union government has brought in stringent changes in the Income Tax Act, black money law and PMLA to tax and confiscate unaccounted wealth stashed abroad. It regularly receives and shares information related to black money with other countries under the information exchange agreements.”
Every person residing in India is also required to disclose foreign investments in their income tax return. In case they fail to do so, they have to face great difficulty in dealing with Income Tax department officials if they get information from any other source, he said.
Giving out more information, the Minister stated that the government enacted a comprehensive and a stringent new law-Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA, 2015), which has come into force in July 1, 2015. The offence of willful attempt to evade tax, etc. in relation to undisclosed foreign income/assets is a scheduled offence under the Prevention of Money Laundering Act, 2002 (PMLA), regarding which suitable action is taken by Directorate of Enforcement (ED) for identification of proceeds of crime generated, provisional attachments and filing of prosecution complaints in suitable cases.
The details of actions taken by ED in relation to cases involving violations related to BMA, 2015 are as under:
During investigation in 13 PMLA cases in relation to predicate offences involving violations related to BMA, 2015, proceeds of crime amounting to Rs 42.57 crore has been attached/seized and three prosecution complaints were filed.
Further, assets amounting to Rs. 93.07 crore were seized under section 37A of FEMA in 05 cases.
The Minister stated that the government has entered into double taxation avoidance agreements /tax information exchange agreements /multilateral convention on mutual administrative assistance in tax matters/SAARC multilateral agreement (tax treaties) which provide for exchange of information that is foreseeably relevant for administration and enforcement of domestic laws concerning taxes. India has been proactively engaging with foreign governments, for exchange of information under these tax treaties.
The Minister further stated that FIU-India is a member of the 167-member Egmont Group, an international organisation for exchange of information and cooperation amongst Financial Intelligence Units (FIUs). As members of Egmont Group, FIUs are free to exchange information on real time basis through a highly secured network – Egmont Secured Web (ESW) – on various matters as per their roles and functions. FIU-India has also entered into Memoranda of Understanding (MoUs) with 48 countries from 2008 up to 2022 to strengthen bilateral relationships with its foreign counterparts and exchange of intelligence.
According to the Minister, there is no official estimation or methodology to define/measure the amount of black money in the country. 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). The reports and the government’s response were forwarded to the Lok Sabha Secretariat for placing them before the Standing Committee on Finance, which, after due deliberations, presented a preliminary report on the matter (i.e. 73rd Report of Standing Committee on Finance) to the Speaker of Lok Sabha on March 28, 2019, This report has observed that ‘the unaccounted income and wealth inside and outside the country do not appear amenable to credible estimation in the context of India.’