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Taxmen find more havens

delhi Updated: Feb 24, 2011 23:49 IST
Debobrat Ghose

If you think Indians have parked their black money only in popular tax havens such as Switzerland, Mauritius and Bermuda, think again. The Income Tax (I-T) department has identified some more tax havens, hitherto unknown, in Europe and other places.

The issue of black money has snowballed into a major political nightmare for the UPA government. US-based research organisation Global Financial Integrity recently estimated the flow of black money at $462 billion between 1948 and 2008.

"Very soon we would make public the new tax havens identified by the I-T department," a finance ministry official said. "We are keeping a close eye on these territories."

At present, Indian tax authorities are keeping track of 14 tax havens, including Switzerland, Mauritius, the Bahamas, Bermuda, British Virgin Islands, Seychelles and the Isle of Man.

India has double-tax avoidance agreements (DTAA) with 78 countries and tax information exchange agreements (TIEA) with 14 territories.

According to the I-T department sources, black money from India reaches these tax havens through internal and external routes. Through an internal route, a tax evader sets up shell companies and bank accounts are opened in these names, and money is siphoned off.

The external route is through so-called hawala operations, which works on mutual trust.

The finance minister Pranab Mukherjee has shown major concern over black money. It is expected that he would take up this issue in the coming budget.