Center Takes Major Steps to Curb Black Money

In wake of increased pressure on center to reveal the details of top officials saving black money in the Swiss banks, Finance Minister of India had announced that these details cannot be revealed without a legal frame work. The government is taking measures to curb the menace of illicit funds accumulated by top officials by tax evasion and corruption. As a part of the strategy to combat this menace, the government is keen on implementing a five pronged strategy, Double Taxation Avoidance (DTA) Agreement and Tax Information Exchange treaty.

The five pronged strategy consists of constructing an accurate legal framework, establishing institutions to deal specifically with illicit funds, development of systems for implementation, developing the manpower with required skills for effective action and joining the hands with global countries to fight against black money.

The Government also signed a protocol with the Swiss Federal Department of finance to amend the Double Tax Avoidance (DTA) agreement, which is regarding the taxes on income. This protocol is supposed to get approval in 2011 end after being passed in the European Parliament.

The Indian government had signed a Tax Information Exchange treaty with the Swiss Government in order to exchange the details of suspected tax evaders and other financial offenders, having accounts in Swiss banks. This treaty after being passed in the European Parliament will come in to effect in India from 1st April 2012.

Apart from taking above measures to restrict illicit funds, the Income Tax Department is under taking search operations for suspected individuals. These operations led to disclosure of illegal income of Rs.15,000 crore in the last 18 months and also for the same period the Directorate of International Taxation had collected taxes of Rs.34,601 crore and still taxes are being collected for additional income of Rs.48,784 crore.

Source: Business World