Black money SIT decides to solve tax treaties' secrecy puzzle

Tags: black money, SIT, News
Tasked with the job of recovering illicit wealth stashed away by Indians, the SIT on black money has decided to look into the contentious issue of secrecy clauses in India's tax treaties with Switzerland and other countries.

India has signed tax information exchange treaties with many countries, but they typically contain a 'confidentiality' clause which forbids sharing of details obtained through such treaties with other law enforcement and investigation agencies, thus coming in the way of coordinated actions by them.

At the centre of discussion of the Special Investigation Team (SIT) -- headed by retired Supreme Court Judge MB Shah -- are close to half-a-dozen black money cases in which information has been received from a foreign jurisdiction by the Income Tax Department or allied agencies, sources said.

However, this information cannot be shared with any other investigative agency as a strict non-disclosure of information clause accompanies these information exchange treaties, they added.

The SIT, sources said, would look into the possibility of requesting competent courts and the relevant authorities in foreign jurisdictions for permission to share with other agencies the data obtained by the Central Board of Direct Taxes (CBDT) and the I-T department.

The agencies for which the data access could be requested include Enforcement Directorate (ED), Directorate of Revenue Intelligence (DRI), Reserve Bank of India and CBI, so that suspects in such cases can be probed from various angles and under provisions of criminal laws.

CBDT and Income Tax department obtain data from foreign nations and tax haven jurisdictions under Double Taxation Avoidance Agreements (DTAAs) or Tax Information Exchange Agreements (TIEAs).

Officials said that a full-fledged foreign exchange violation and money laundering probe in the LGT Bank accounts case has been slowed down due to restrictions on information- sharing between various agencies.

"The agencies only have access to a limited number of documents in the LGT case and hence the probe is not (progressing at the pace it) should. If the documents are available, prosecution can easily be started in these cases with regard to contraventions in the foreign exchange domain and possibly money laundering laws too," officials said.

India, at present has over 80 operational DTAAs and 40 TIEAs.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • India’s festivals teach us to share our wealth and joy

    India is an aporia in its own true sense.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Tushar Gandhi

Sustainable model for rural sanitation

Prime minister Narendra Modi has promised to build a toilet ...

Zehra Naqvi

How smells evoke strong memories

Remember that time when a passing fragrance transported you to ...

Dharmendra Khandal

Indian zoos need a fresh approach

Recently, when a man jumped in a tiger trench of ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture