The Centre has informed the Supreme Court that black money stashed in tax havens abroad would be taxable income under the Direct Taxes Code Bill. It however, maintained its earlier stand on not revealing names of Indians who have stashed their money in foreign accounts.
In its fresh affidavit, the government spelled out a host of measures it has initiated to retrieve the black money. The affidavit was filed a day before a bench comprising justice B Sudershan Reddy and justice SS Nijjar would hear the PIL seeking a direction to the government to bring back black money.
The government, however, admitted it did not conduct any fresh study on black money so far due to the reason that credibility of any estimate of such money was doubtful and transactions by their very nature were "unrecorded, unreported, complex and layered."
The Centre said it has initiated talks with 65 countries to amend the existing Double Taxation Avoidance Agreement (DTAA) and broaden the scope of the article concerning exchange of information.
Filed by senior advocate TA Khan, the affidavit informed SC that it has completed negotiations for Tax Informations Exchange Agreement (TIEA) with 10 countries where the money is believed to have been stashed.
The countries are Bermuda, British Virgin Island, Isle of Man, Cayman Island, British island of Jersey, Monaco, St Kitts and Nevis, Argentina and Marshall Island.
"It is submitted that the Centre has proposed new provisions for unearthing black money in the Direct Taxes Code Bill by defining taxable assets as inclusive of the deposits in banks located outside India in case of individuals and such bank deposits not recorded in the books of account in case of others," the affidavit said.
The finance ministry has also proposed to conduct an assessment of the unaccounted wealth, both inside and outside the country.
This decision has been taken on account of the recent international and domestic developments, the affidavit stated.