The Income Tax Department has begun opening overseas tax units in countries with low tax. Income Tax Department ha opened two offices so far in Singapore and Mauritius and by March we will open another eight overseas locations like cyprus. These offices are primarily targeted in tax havens to prevent tax evasion.
Union revenue secretary Sunil Mitra said on the sidelines of a FICCI executive counil meeting that the illicit money outflow is worrisome. He said quoting a report of the Global Financial Integrity that the estimated illicit flow for India has increased five times to 2.4 per cent of the GDP from 0.5 per cent, while the same had decreased to 8.8 per cent from 14.1 per cent between 2000 and 2008.
GFI has estimated continuing outflow level of illicit funds of around 20 billion in recent years and Mitra said India was keen to tax this money.
Mitra said the government was trying to address this issue and propose to take certain measures in the new Direct Tax Code like developing a tool box of counter measures against non-cooperative jurisdiction, introduction of advance pricing agreement and changes in wealth tax provisions.
