Names of tax defaulters to be made public: Pranab

Finance Minister Pranab Mukherjee disclosed today that the government was working on a number of strategic initiatives to curb generation of black money and for its detection, including the feasibility and methodology of putting the names of chronic tax defaulters in public domain.

The minister, who unveiled the steps taken by the government to deal with black money and corruption, hit out at BJP and other political parties for attacking the UPA on its track record.

He said the BJP, which was in power for six years at the Centre, and CPI, whose late Indirajit Gupta was Home Minister for over one-and-a-half years, had done precious little to deal with corruption and black money.

Mukherjee told PTI that details of assets and payments received by Indian citizens in several countries have "started flowing in" and were being investigated.

Information about wealth stashed away in Swiss banks by Indians was expected before year-end, he said, pointing out that New Delhi has signed a Double Taxation Avoidance Treaty withy Berne.

It was likely to be ratified by the Swiss Parliament by September and information about tax avoidance should be available thereafter.

Information on assets and payments received by Indian citizens was under different stages of processing, he said.

On various estimates of Indian money stashed away abroad, including the figure of USD 468 billion, Mukherjee said, "This is just playing to the gallery."

Replying to a question on the latest official figure given by the Swiss National Bank that the Indian money held in various accounts in Swiss banks is to the tune of USD 2.5 billion, Mukherjee said he cannot comment on it straightaway.

"I have asked our Ambassador to check on the issue."

He said the government has commissioned an in-depth study engaging three top national-level institutions for estimation of unaccounted income and wealth held within and outside India.

This study, he said, will bring out the nature of activities that encourage money laundering and its ramifications on national security. The study is expected to be completed within a period of 18 months.

Besides creating an appropriate legislative framework, the government started renegotiations with 75 countries to get more information. Negotiations had been completed with 53 countries or jurisdictions, Mukherjee said.

On tax evasion, the Minister said a committee of top tax officials has been constituted by the Central Board of Direct Taxes (CBDT) under the chairmanship of Director General of IT (Administration) Anita Kapur with broad terms of reference suggesting modalities for utilisation of the information available with Financial Intelligence Unit (FIU) and the directorate of Income Tax (Systems) for the recovery of outstanding demand in such cases.

The committee would also examine the possibilities of engaging outside agencies to locate the whereabouts of non-traceable assesses or their assets and also unknown and undisclosed assets owned by the assesses with inadequate assets vis-a-vis the outstanding demand.

The committee will consider proposing a reward scheme for informants who supply information about such tax defaulters and which results into collection of the outstanding demands.

The other point in the terms of reference is to propose a scheme regulating such outsourcing to outside agencies for its administration by the field formation.

The committee shall submit its report within 2 months.

Earlier, it was noticed that there is a huge outstanding demand which is not recoverable due to reasons like assesses not being traceable and there were no assets available for recovery.

Mukherjee said the amendment of Prevention of Money Laundering Act (PMLA) has tremendously widened the scope of money laundering investigations.

During such exercise involving a number of investigations, the Directorate has initiated overseas enquiries and forwarded letters of request to foreign administrations for not only collection and verification of information but also for obtaining evidence.

The provisions of PMLA also allow for causing attachment of the tainted proceeds located abroad by requesting the foreign administrations through letters of request issued by competent courts.

In the proposed Direct Taxes Code Bill, he said for the purpose of levy of wealth tax, taxable assets have been defined to include deposits in banks located outside India in the case of individuals, unreported bank deposits in the case of others, interest in a foreign trust of any other entity and any equity or preferential shares held in a controlled foreign company.

The General Anti-Avoidance Rule (GARR) has been incorporated to deal with aggressive tax planning devices used to circumvent tax laws.

Specific Controlled Foreign Company (CFC) rules have been incorporated to bring to tax passive income earned by residents from substantial shareholding in companies situated in low tax jurisdictions.

In the DTC bill, a reporting requirement has been introduced making it obligatory on the part of resident assessees to furnish details of their investment and interest in any entity outside India in the form and manner as may be prescribed.

Talking about institutions involving illicit funds, Mukherjee said administrative set up in the priority countries and jurisdictions is being strengthened for effective exchange of information, intelligence gathering and effective implementation of the provisions of international taxation and transfer pricing.

Recently, income tax overseas units in eight countries namely USA, UK, Netherlands, Japan, Cyprus, Germany, France and UAE have been created.

"We are in the process of deploying officers at these locations. As on date, we have two income tax overseas units located in Mauritius and Singapore and these units are providing valuable information," he said.

Once India finalises Tax Information Exchange Agreements with priority countries and jurisdictions, he said government would review creation of more income tax overseas units depending upon requirements.

The existing set up in Foreign Tax Division (CBDT) has been strengthened. Additional manpower has already been put in position, he said.

A dedicated Exchange of Information (EOI) Unit with direct access power has been created under the Foreign Tax Division of CBDT to ensure that the work of exchange of information is effectively carried out.

The government has approved the creation of the Directorate of Income Tax (Criminal Investigation) in the CBDT.

The DCI will perform functions in respect of criminal matters having any financial implication punishable as an offence under any direct tax law.