In a letter written to the finance minister, Ficci said, The government should create provisions where all payments beyond a particular limit should be only through credit cards and bank instruments. This could be introduced initially in the cities and spread over a period of time to other locations.
Ficci also suggested amnesty Scheme to bring black money back from overseas. If black money comes back with reasonable penalties and channelised into our priority needs of development, it is good for the country, Ficci president RV Kanoria said, adding there were historical reasons for Indians to take the money abroad as the rates of taxation were as high as 97.75% back then.
Whilst there are several measures that can be taken to reduce the size of the shadow economy, the ability of the revenue to link up the Annual Information Reports filed by corporate, the exemption claims made, the lower withholding certificates filed, are a key link of tracking the flow of funds and plugging elements of shadow economy," Ficci said in its letter.
The black money lying abroad has become a big issue for the government as it is under pressure from the opposition parties, supreme court and civil societies to bring back such illicit wealth and prevent flow of money abroad.
In May last year, the government had constituted a panel headed by CBDT chairman to look into strengthening of the law to curb black money generation and examine the existing legal and administrative framework. The committee is likely to submit its report by the end of this month. India has also completed tax negotiation agreements with 58 countries, which include Double Taxation Avoidance Agreements (DTAAs) and Tax Information Exchange Agreements (TIEAs). Out of these 58 treaties, India has amended DTAAs with 22 countries and signed new DTAAs with 19 nations. Besides, it has also signed 17 TIEAs.