Press Trust Of India
New Delhi, Dec 14: Tax evasion needs to be made a serious ‘criminal offence’ to force foreign countries to reveal names and account details of Indians stashing illicit wealth abroad, the Special Investigation Team (SIT) on black money has said.
While adding more teeth to India’s pursuit of black money kept abroad, this would also check generation of unaccounted wealth within the country, SIT chairman MB Shah said.
At present, tax evasion is a civil offence in India and it is dealt under the Income Tax Act, 1961 while forex violations are dealt under the Foreign Exchange Management Act (FEMA). Both the laws are civil in nature and do not have criminal proceedings attached as such.
‘‘We have made a serious pitch for this (making tax evasion a serious criminal offence in India). One reason is that, if tax crimes remain civil in nature, the foreign governments will not cooperate,” Shah told the media.
“If this is made a crime, then there is no difficulty and then they (foreign countries) are bound to reveal the names. That is the main purpose,’’ he added.
The Supreme Court-constituted SIT, which has former Supreme Court judges MB Shah and Arijit Pasayat as chairman and vice-chairman, recently submitted its latest report on black money menace, wherein it has disclosed tracing of `4,479crore held by Indians in a Swiss bank and unaccounted wealth worth `14,958 crore within India.
In this report, the SIT pointed out that over 25 countries have made ‘‘tax crimes’’ a predicate offence.
India is seeking cooperation from a number of foreign jurisdictions, including Switzerland, in cases of suspected black money, but its requests have been turned down in maximum number of such instances as tax evasion is not dealt under strict criminal laws, unlike money laundering
provisions.
To deal with this issue, the SIT has suggested making tax evasion of `50 lakh and above a ‘predicate offence’, saying this would enable easier investigation into tax evasion crimes under the stringent laws of money laundering as stipulated under the Prevention of Money Laundering Act (PMLA).