Timely action saved Rs 66k cr illegal money:FM

New Delhi, Feb 14 (PTI) Finance Minister Pranab Mukherjee today said timely action by revenue authorities prevented illegal transfer of Rs 66,085 crore by multinational companies in 2010-11. "The Directorate of Transfer Pricing in the Ministry (of Finance) helped in saving Rs 66,085 crore during the last year by timely stopping the illegal transfer of money through transfer pricing," he said at the meeting of Central Direct Taxes Advisory Committee (CDTAC) here.

Multinational companies use transfer pricing for products and services in cross-border trade between their related entities to shift profits to countries with low tax rates. In the process, countries lose tax revenue. Mukherjee said the government has taken several steps to unearth black money and legislative measures to obtain banking information — through Double Taxation Avoidance Agreements (DTAA) and Tax Information Exchange Agreements (TIEA) — are being negotiated. As many as 25 tax treaties have been concluded for improved exchange of information.

He told CDTAC members, representing different fields, about the government`s intent to develop and inculcate a tax structure which would encourage people to voluntarily pay taxes, while tax administration acts as a facilitator. "Initiative of the government is to provide citizen centric governance in order to improve taxpayer services and redressal of public grievances," Mukherjee said. Members suggested extension of deduction for investment in the infrastructure bonds for at least one more year and increasing the limit under it to Rs 50,000, from Rs 20,000 at present, an official statement said.

Members also suggested steps to curb black money in real estate transactions, provide relief to the salaried tax payers by retaining the standard deduction under Section 16 of the Act for a sum of Rs 50,000 and extending the benefit of nil TDS to NBFCs. CBDT Chairman Laxman Das said the Department is setting- up another Central Processing Centre at Ghaziabad to process TDS returns and it will result in reduction of TDS mismatches during the processing of tax returns.