While the initial budgetary allocation for these units was Rs 2.41 crore in the current fiscal, it has been raised to Rs 18.20 crore in the coming year.
The latest budgetary allocation by Finance Minister Pranab Mukherjee has come at a time when the eight units are scheduled to operationalise within the current fiscal, and the job is being accorded the highest priority by the Finance Ministry.
While the Central Board of Direct Taxes (CBDT) has finalised the names of the Indian Revenue Service (Income Tax) officials who will man these units, the final deployment will soon take place in coordination with the Ministry of External Affairs (MEA).
The proposed eight units will be in the United States of America (USA), United Kingdom (UK), the Netherlands, Cyprus, Germany, France, Japan and United Arab Emirates (UAE). Two such units in Singapore and Mauritius are already operational since 2010.
The units will be manned by a senior I-T officer adept in handling tax evasion cases and international tax treaties and will also help the department liaise with authorities of these countries in various high-profile cases which the I-T is currently investigating.
The units will also help investors from abroad understand Indian tax laws and procedures so that they can make informed decisions, I-T sources, familiar with the development, said.
The I-T officers will be designated as First Secretaries at the Indian Mission or Embassy at these foreign locations.
As a number of probes of the I-T department are linked to these countries, the Finance Ministry expects having an office in these nations would help expedite the investigation process.
The units would also obtain seamless flow of information on tax and financial data of investments made by individuals and institutions in these countries and facilitate any data on investment or routing of money in the country and vice-versa.
This information helps during investigations in cases of tax evasion and ensuring tax compliance under the provisions of the Double Taxation Avoidance Agreement (DTAA) and other tax treaties, the sources said.
The Finance Ministry has made it an essential criteria for the I-T officers posted in these units to have had a stint with the foreign taxation wing of the CBDT or international taxation and transfer pricing unit of the I-T department and also at the investigation wing.
The officer should also have a knowledge of tax and other laws of these countries, they said.