(a) whether the Central Vigilance Commissioner has suggested that the Government should
consider a three-phased integrated approach to get rid of biack money in the country;
(b) if so, the details thereof; and
(c) the reaction of the Government thereon?
MINISTER OF THE STATE IN THE MINISTRY OF FINANCE (SHRI S.S. PALANIMANICKAM)
(a) & (b): Yes, Sir. The then Central Vigilance Commissioner in a paper, in
2001, suggested a three-phase strategy to tackle black money asfollows:-
(i) Phase I - Strengthen the legal framework against black money hoarders.
(ii) Phase II - Give a window of opportunity to black money hoarders
to come out in the open after paying appropriate income tax.
(iii) Phase III - Ruthless and widespread application of the legal
framework designed in phase-I
(c): The Government has taken the following steps on these suggestions:
(i) FM has declared in the Budget Speech 2009-10 that Government proposes to
pursue structural changes in Direct Taxes by releasing the new Direct Taxes Code:
(ii) Initiated simplification of Indirect Tax Laws with reduction of discretion as an objective.
(iii) The scope of the Authority for Advance Rulings in indirect taxes was enlarged in 2005
to cover wholly owned subsidiary Indian companies having foreign holding companies and also
Indian residents who belong to a category of persons notified by the Central Government.
(iv) The Prevention of Money Laundering Act, 2002 has been brought into force w.e.f 1.7.2005
and investigations /prosecutions under the Act are being vigorously pursued. Further the
Prevention of Money Laundering (Amendment) Act 2009 has inter-alia included Customs duty
evasion as well as evasion of prohibitions under the Customs Act as a scheduled offences
under PMLA.
(v) The income Tax Department has taken several punitive and deterrent steps to unearth black
money. These include scrutiny of returns, surveys, search & seizure action, imposition of
penalty and launching of prosecution in appropriate cases. Among other efforts to unearth
black money, Tax Information Network (TIN) has been set-up as depository of important tax
related information which can be assessed by the Department. Information as regards suspicious
transactions and large cash transactions, as disseminated by the Financial Intelligence Unit,
India (FIU-IND) is also investigated by the income Tax Department.
However,there is no proposal at present for bringing a disclosure scheme for black money.