Efforts to Tackle Black Money

  • Black money includes all funds earned through illegal activity and otherwise legal income that is not recorded for tax purposes.
  • Black money can reduce the negative impact of oppressive laws.
  • Black money can be illegally disguised as legitimate money through money laundering.

 

  • Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 – to specifically and more effectively deal with the issue of black money stashed away abroad:
    • Apart from prescribing more stringent penal consequences, this law has included the offence of wilful attempt to evade tax in relation to undisclosed foreign income/assets as a Scheduled Offence under the Prevention of Money-laundering Act, 2002 (PMLA).
    • This has helped the government raise a demand of Rs 8,216 crore from these instances of detected violations of the act in form of non-disclosure of foreign income and assets.
    • It has also enabled the government to detect undisclosed income of approximately Rs 11,010 crore in connection with the International Consortium of Investigative Journalists (ICIJ) cases.
  • The government has been engaging with foreign governments with a view to facilitate and enhance the exchange of information under the Double Taxation Avoidance Agreements (DTAAs)/Tax Information Exchange Agreements (TIEAs)/Multilateral Conventions.
    • The availability of real-time data on overseas investments by Indians has improved. The Automatic Exchange of Information based on Common Reporting Standard started in 2017, enabling the country to monitor the financial account information of Indian residents in other countries.
  • Constitution of the Special Investigation Team (SIT) on Black Money under chairmanship and vice-chairmanship of two former judges of Supreme Court
  • India has entered into an information-sharing agreement with the USA under the Foreign Account Tax Compliance Act of the USA.