Income Tax department receives data on NRI black money from six countries

India’s efforts at retrieving the black money its corrupt citizens have stashed abroad are being helped by some countries. The Income Tax has made a list of 135 individuals and entities, who received payments of more than Rs 1 crore from companies abroad, and sent it to the Director General of Investigation in cities where they are supposed to be residing for further investigation.

The information has been culled out from data received from US, Finland, Japan, Korea, Denmark and New Zealand on entities in these countries having made payments to Indians.

The payments were in the form of dividends, interests, royalties, salaries and wages, fees, pensions, etc, some of which the department believes are merely a cover-up and could be linked to money laundering.

The data was received as part of the information exchange agreement with the Organisation of Economic Cooperation and Development (OECD) countries, though not all of them have been cooperating with India at present. For instance, Switzerland and many of the tax havens have refused to share any information.

The directorate general of I-T Intelligence in Delhi, which was entrusted with the job of analysing this information, had till May 2010 received 25 CDs in two lots from these six countries out of which 14 were returned to the finance ministry for want of passwords to open them.

|Of the 11 CDs, the directorate prepared a list containing names of 9,500 individuals and entities whose addresses could not be located. All such cases have now been sent to source country for more details.

Besides the 135 entities which are being investigated, the DG Intelligence has forwarded a list of more than 5,000 names who were beneficiaries of foreign remittances to the tune of Rs 1 lakh and above but below Rs 1 crore. These names have been referred to the chief commissioners in different cities for identification and further probe.

The data received from Australia and Japan do not carry details such as father’s name, address, PAN card or date of birth. Though in some cases Indian addresses were available, they were later found to be incomplete.

India has, meanwhile, informed the foreign authorities to send any future data with complete information containing PAN, date of birth, father’s name of the person to whom payments have been made, etc.

The department is already working on a database on shell companies operating out of foreign jurisdictions used by some of the Indian corporates and corrupt public servants for the purpose of tax evasion.

The government has set up two Income Tax Overseas Units (ITOUs) within Indian missions in Singapore and Mauritius to facilitate exchange of information and has plans to constitute more units in eight other countries — USA, UK, Netherlands, Japan, Cyprus, Germany, France and the UAE.

These form part of the effort to widen the tax-base which has been almost stagnant at 3.5 crore though the number of PAN cards issued are above 9 crore and the department believes that there are many entities which are not filing returns even when they are eligible and at times engaged in money laundering.

The I-T department through Annual Information Returns (AIR), Central Information Branches (CIB) and other sources is using information on high value transactions to get back at tax evaders.