The government has set up a committee to examine ways to strengthen laws to curb the generation of black money and its transfer to overseas locations and to bring these back into India’s legitimate financial system.
The panel will be headed by the Central Board of Direct Taxes chairman.
The move comes exactly a week before the proposed indefinite hunger strike by yoga guru Baba Ramdev from June 4, to pressure the government to bring back black money allegedly stashed in foreign tax havens.
Senior government officials recently briefed Ramdev about the legal constraints in bringing back black money parked abroad. Ramdev, however, has demanded concrete steps from the government.
The committee will examine the existing legal and administrative framework to deal with the generation of black money through illegal means and submit its report within six months.
The government has proposed a multi-pronged action plan with an array of measures, including amended tax treaties with foreign countries to stem the illicit flow of money in undisclosed overseas bank accounts.
The steps also include creating an appropriate legislative framework, setting up institutions to deal with illicit funds, developing systems for implementation and imparting of skills to manpower for effective action. A task force has also been set up to quantify the amount of black money in tax havens abroad. Estimates put it at upwards of R20 lakh crore.