India has set up its income tax offices in two nations?Singapore and Mauritius?and will soon have such offices in at least eight more nations in an attempt to get information on tax evaders who have either parked illegal money in these countries or are using them to route the money back to India.
?In order to facilitate exchange of information, two income tax over-seas units within the Indian Mission have been created in Singapore and Mauritius and officers have been posted there,” finance minister Pranab Mukherjee informed the
Parliament on Tuesday. It has also been decided to create 8 more such units in USA, UK, Netherlands, Japan, Cyprus, Germany, France and UAE, he added.
Besides, the Central Board of Direct Taxes (CBDT) has asked its investigation directorates to keep a watch on Indians visiting the tax haven nations apart from those suspected to have bank accounts there, Mukherjee said.
In order to avail the tax treaties between India and the other nations, tax evaders route investments through these nations into India. While currently there is no provision to exchange information in this regard, the repatriation of the money deposited abroad is also not possible.
The minister also said there is no current proposal for legislative changes to arrest stashing away black money out of the country and that there is no verifiable information available about money allegedly parked in banks located abroad.
Efforts are also being made to collect evidence during search/survey operations pertaining to opening of foreign bank accounts or other assets outside India, he said, adding that whenever any specific case of suspected unauthorised maintenance of accounts abroad by Indians comes to the notice of the department of enforcement, appropriate action is taken.
“No roving enquiries can be made by the directorate,” he however added.
The finance ministry has requested existing partner countries to renegotiate an article concerning exchange of information in the tax treaties for specifically including provisions for obtaining bank related information.
Responses from some of these countries, along with their counter proposals, have also been received recently, he said, adding that negotiations have already been completed in one case. Those countries where the tax treaties do not have provisions relating to assistance in collection of taxes, have been approached for inclusion of such a provision.