Business Today

Tough laws in offing to curb black money

The recently constituted committee headed by CBDT chairman Prakash Chandra is looking for ways to strengthen the country's laws to curb the generation of black money and its legal transfer abroad.

Mail Today Bureau | June 10, 2011 | Updated 17:15 IST

With pressure mounting on the government after the botched up Baba Ramdev operation, the recently constituted committee headed by Central Board of Direct Taxes (CBDT) chairman Prakash Chandra met on Thursday to examine ways to strengthen the country's laws to curb the generation of black money and its legal transfer abroad. The committee is also looking at measures to recover huge amounts of illicit funds stashed away in overseas tax havens by Indian citizens.

This is the first meeting of the committee, which includes as members the director of the Enforcement Directorate (ED), director general of the Directorate of Revenue Intelligence (DRI), director general (currency), and has the Commissioner of Income Tax (Investigations) as member, secretary. The committee has decided to seek public comments on ways to unearth black money, a senior official said.

According to sources, the committee is also looking at the issue of bringing in a law that will enable the government to declare wealth generated illegally as a national asset. This has been a major demand raised by the yoga guru, which the government had in fact agreed to accept before relations with him soured dramatically after the ham-fisted midnight swoop by the Delhi police at the Ramlila ground in the capital.

The committee is examining the existing legal and administrative framework to deal with the menace of generation of black money through illegal means and is discussing whether these laws can be amended to confiscate and recover such assets.

"It may also recommend the enacting of new laws that are more stringent than the existing ones to enable the government to tackle the black money menace more effectively," a senior official said.

The issue of enhancing the punishment for tax evasion so that it serves as an effective deterrent is also under discussion. Various stakeholders, such as the captains of Indian industry will also be consulted and the committee is expected to submit its report within a period of six months.

The government, which was first jolted into action following questions raised by the Supreme Court on the black money issue, is now facing a blitzkrieg from civil rights activists led by Anna Hazare and yoga guru Ramdev.

The government appears to have gone into a flurry of activity after drawing flak on the black money issue. It had, on Wednesday, announced the setting up of another committee to suggest ways of tracing absconding tax defaulters and hidden assets of tax dodgers so that amounts due to the government can be recovered.

The committee will also look at the possibility of putting the list of chronic defaulters in the public domain, which will pressure them to pay up their taxes. The Supreme Court had earlier expressed its displeasure over the government refusing to disclose the names of Indian entities who had stashed away black money in overseas tax havens. Finance minister Pranab Mukherjee had then announced that the Indian government could not disclose the names of 18 Indian entities who had stashed away black money in foreign banks, since the information, which was provided by the German authorities, was obtained under "a secrecy clause".

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