Know Indian Black Money

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KNOW INDIAN BLACK MONEY

What is black money?

Black money is known by various names, such as black economy, parallel

economy, underground economy, subterranean economy, unaccounted economy,and unobserved economy.

1. Definitions

THE definitions range from a restricted one involving the quantum of tax revenueto a wide one covering all economic activities which, because of accountingconventions, non-reporting or under-reporting, escapes the GNP system ofaccounts or other social measures. The existing literature on the subject issometimes bedevilled by the careless use of concepts. A basic source of the

problem is the failure to distinguish between what the economists call flows andstocks. There is the flow of black income, that is, the income which isearned inthe process of evading indirect taxes and/or the part of income, however earned,which is not declared for direct taxes, on the one hand, and there is also the blackwealth, a stock, that arises from the cumulation of the savings out of blackincome, on the other.

The Board of Internal Revenue (UK) defines black money as economic activitygenerating income which is concealed from the revenue collecting authorities with

the intention of evading tax. The Central Statistical Organisation (UK)characterises the phenomenon as activities that are not reported in the nationalincome accounts. Unreported activity has been defined as the activity thatgenerates factor income which cannot be estimated from the regular statisticalsources used to compile the income measures of gross domestic product, observedMakafee*. Feige* also considered unaccounted economy (unobserved economy)as those economic activities that go unreported or are unmeasured by the societyscurrent techniques for monitoring economic activity. Another definition in thesame vein has been offered by Tanzi*: it is gross national product that because ofunreporting and/or under-reporting is not measured by official statistics

Black money arises mainly from incomes not disclosed to the government usuallyto avoid taxation, and, sometimes, because of its criminal links. In India, Blackmoneyrefers to funds earned on theblack market,on which income and othertaxes have not been paid. The total amount of black money deposited in foreign
http://en.wikipedia.org/wiki/Black_markethttp://en.wikipedia.org/wiki/Black_market


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banks by Indians is unknown. Some reports claim a total exceeding US$1.4 trillionare stashed in Switzerland. Other reports, including those reported by SwissBankers Association and the Government of Switzerland, claim that these reportsare false and fabricated, and the total amount held in all Swiss banks by citizens ofIndia is about US$2 billion

Size of India's black economy

In 2011, the government had commissioned a joint study by three think-tanks -NIPFP, NIFM and NCAER - to estimate Indian entities' unaccounted wealth bothat home and abroad. The final report has not been submitted.

India ranked fifth largest exporter of illicit money between 2002-2011, with a totalof $343.04 billion, and in 2011 it was placed third when $84.93 billion was sentabroad, according to a 2013 report titled 'Illicit Financial Flows from DevelopingCountries: 2002-2011'

According to Global Financial Integrity (GFI), a Washington-based think-tank,Indians salted away $462 billion (about Rs. 28 lakh crore in current exchangerates) in overseas tax havens between 1948-2008

As per Swiss National Bank's latest data, the total money held by Indians in Swiss

banks stood at over Rs. 14,000 crore as on December 2013, up by nearly 42% froma year ago

The capital outflows stem from crime, corruption, tax evasion, and other illicitactivity.

Illicit Financial Flows from Developing Countries: 2002-2011

This December 2013 report from Global Financial Integrity, Illicit FinancialFlows from the Developing World: 2002-2011, finds that the developing worldlost US$5.9 trillion in illicit financial flows from 2002-2011, with illicit outflowsalarmingly increasing at an average rate of more than 10 percent per year.

The report is the fourth update of Global Financial Integritys groundbreakingreport, Illicit Financial Flows from Developing Countries 2002-2006. For the first


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time, this years report incorporates re-exporting data from Hong Kong and usesdisaggregatedas opposed to aggregatedbilateral trade data for those countrieswhich report it.

The report finds that from 2002 to 2011, developing countries lost US$5.9 trillionto illicit outflows. The outflows increased at an average inflation-adjusted rate of10.2% per year over the decadesignificantly outpacing GDP growth.

As a percentage of GDP, Sub-Saharan Africa suffered the biggest loss of illicitcapital. Illicit outflows from the region averaged 5.7% of GDP annually. Globally,illicit financial outflows averaged 4% of GDP.

China leads the world over the 10-year period with US$1.08 trillion in illicitoutflows. However, 2011 marked the first time that Russias illicit outflowsexceeded Chinas, with a loss of US$191.14billion against Chinas US$151.35

billion. The previous methodology had significantly understated Russias illicitoutflows, while it overstated Chinas illicit outflows.

Report Findings Include:

Developing countries lost US$946.7 billion in illicit outflows in 2011, anincrease of 13.7% over the US$832.4

billion that flowed out of developing countries in 2010. The 2011 outflows are thehighest on record over the decade.Developing countries lost US$590.0 billion per annum on average through

illicit outflows over the decadeending 2011. Cumulatively, developing countries lost US$5.9 trillion to illicitoutflows between 2002 and 2011.Adjusted for inflation, illicit financial flows grew by an annual rate of 10.2%.Outflows grew every year studied,slowing only briefly at the onset of the global financial crisis toward the end of thedecade.Illicit financial flows have increased in every region of the developing world.Adjusted for inflation, annual illicitfinancial flow growth by region over the decade was: Middle East and North Africa (MENA) ............................................. 31.5% Sub-Saharan Africa (Africa) ............................................................ 20.2% Developing Europe .......................................................................... 13.6%


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Asia ................................................................................................... 7.5% Western Hemisphere ........................................................................ 3.1%

Asia accounted for 39.6% of total illicit flows from the developing worldfollowed by developing Europe (21.5%),the Western Hemisphere (19.6%), the Middle East and North Africa (11.2%), andSub-Saharan Africa (7.7%).Illicit outflows averaged roughly 4.0% of GDP per year from all developingcountries over the decade. As a percentof GDP, Sub-Saharan Africa had the biggest problemwith average annual

illicit outflows totaling 5.7% of

GDPfollowed by developing Europe (4.5%), Asia (4.1%), MENA (3.5%), andthe Western Hemisphere (3.5%).

New Methodology

Last year, Global Financial Integrity debuted several important revisions to itsHMN (Hot Money Narrow) methodology for calculating illicit financial flows.This report continues to revise GFIs methodology by making significant changesto how it calculates GER (Gross Excluding Reversals) to estimatetrademisinvoicing.

For the first time, this years report incorporates re-exporting data from Hong

Kong and uses disaggregatedas opposed to aggregatedbilateral trade data forthose countries which report it. The authors of this report believe that GFIs

previous methodologywhich was accepted by most economists studying trademisinvoicingresulted in an estimate that potentially overstated illicit outflowsfrom many Asian countries and understated illicit outflows from other countries.Post-revision, the authors believe they have produced the most accurate estimate ofglobal illicit financial outflows produced by GFI to date.

.

Countr y Rankings

The Top 25 countrieswith the highest measured cumulative illicit financialoutflows between 2002 and 2011 were:
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Rank Country Illicit Outflows Rank Country Illicit Outflows

1. China: US$1.08tn 14. Philippines: US$88.87bn

2. Russia: US$880.96bn 15. Costa Rica: US$80.65bn

3. Mexico: US$461.86bn 16. Belarus: US$75.09bn

4. Malaysia: US$370.38bn 17. Qatar: US$62.82bn2

5. India: US$343.93bn 18. Poland: US$49.39bn

6. Saudi Arabia: US$266.43bn 19. Serbia: US$49.37bn

7. Brazil: US$192.69bn 20. Chile: US$45.20bn

8. Indonesia: US$181.83bn 21. Paraguay: US$40.12bn

9. Iraq: US$78.79bn1 22. Venezuela: US$38.97bn

10. Nigeria: US$142.27bn 23. Brunei: US$38.37bn2

11. Thailand: US$140.88bn 24. Panama: US$38.09bn

12. United ArabEmirates:

US$114.64bn2 25. Turkey: US$37.28bn

13. South Africa:US$100.73bn

Footnotes

1.

Data for Iraq was not available in 2002-2006, thus the average illicitoutflows of US$15.76 billion reflect only the years 2007-2011. Likewise,the cumulative outflows of US$78.79 billion for Iraq are cumulativeoutflows for 2007 through 2011 only.

2. Illicit financial outflow estimates from the oil exporting nations of Brunei,Qatar, and the United Arab Emirates should be viewed with caution as theycould be inflated due to opaque transactions with their nations sovereign


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wealth funds. GFI has flagged these countries in particular as their NetErrors and Omissions are greater than 50% of their Financial Account

Sources:

http://gfintegrity.org/wp-content/uploads/2014/05/Illicit_Financial_Flows_from_Developing_Countries_2002-2011-HighRes.pdf

http://iff.gfintegrity.org/iff2013/country_data-illicit_financial_flows_from_developing_countries_2002-2011.pdf

Double taxation agreements

Double taxationis the levying of tax by two or more jurisdictions on the samedeclared income (in the case ofincome taxes),asset(in the case ofcapitaltaxes), orfinancial transaction (in the case ofsales taxes). This double liabilityis often mitigated by treaties between countries.

The term 'double taxation' is additionally used, particularly in the USA, to refer to

the fact thatcorporateprofits are taxed and the shareholders of the corporation are

(usually) subject to personal taxation when they receive dividends or distributionsof those profits.

India has comprehensive Double Taxation Avoidance Agreements (DTAA ) with

88(signed 88 DTAAs out of which 85 have entered into force) countries. This

means that there are agreed rates of tax and jurisdiction on specified types of

income arising in a country to a tax resident of another country. Under the Income
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Tax Act 1961 of India, there are two provisions, Section 90 and Section 91, which

provide specific relief to taxpayers to save them from double taxation. Section 90

is for taxpayers who have paid the tax to a country with which India has signed

DTAA, while Section 91 provides relief to tax payers who have paid tax to a

country with which India has not signed a DTAA. Thus, India gives relief to bothkind of taxpayer.

A large number of foreign institutional investors who trade on the Indian stock

markets operate fromSingapore and the second beingMarutius.According to

the treaty between India and Mauritius, capital gains arising from the sale of shares

are taxable in the country of residence of the shareholder and not in the country of

residence of the company whose shares have been sold. Therefore, a company

resident in Mauritius selling shares of an Indian company will not pay tax in India.

Since there is nocapital gains tax in Mauritius, the gain will escape tax altogether.

The Indian and Cypriot tax treaty is the only other such Indian treaty to provide for

the same beneficial treatment of capital gains.

Interestingly, Singapores investment of $5.98 billion has over taken Mauritiuss

investment of $4.85 billion as the single largest investor for the year 2013-14.

Swiss Banking Act of 1934

Bank secrecy was codified in Switzerland by the 1934Federal Act on Banks andSavings Banks(Swiss Banking Act of 1934) following a public scandal in France,when MPFabien Alberty denouncedtax evasionby eminent French personalities,including politicians, judges, industrialists, church dignitaries and directors ofnewspapers, who were hiding their money in Switzerland. He called these men of"a particularly ticklishpatriotism", who "probably are unaware that the money theydeposit abroad is lent by Switzerland toGermany". ThePeugeotbrothers andFranois Coty,of the famous perfume family, were on his list. Since then,Swiss

banks have acquired worldwide celebrity due to theirnumbered bank accounts,which critics such asATTACNGO alleged only help legalized tax evasion,moneylaundering and more generally theunderground economy.

Under the Swiss principle of bank secrecy,privacy is statutorily enforced, withSwiss law strictly limiting any information shared with third parties, including taxauthorities, foreign governments or even Swiss authorities, except when requested

by a Swiss judge's .banking is not strictly anonymous since under its banking law
http://en.wikipedia.org/wiki/Singaporehttp://en.wikipedia.org/w/index.php?title=Marutius&action=edit&redlink=1http://en.wikipedia.org/wiki/Capital_gains_taxhttp://en.wikipedia.org/wiki/Federal_Act_on_Banks_and_Savings_Bankshttp://en.wikipedia.org/wiki/Federal_Act_on_Banks_and_Savings_Bankshttp://en.wikipedia.org/wiki/Federal_Act_on_Banks_and_Savings_Bankshttp://en.wikipedia.org/wiki/Federal_Act_on_Banks_and_Savings_Bankshttp://en.wikipedia.org/w/index.php?title=Fabien_Alberty&action=edit&redlink=1http://en.wikipedia.org/wiki/Tax_evasionhttp://en.wikipedia.org/wiki/Patriotismhttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Peugeothttp://en.wikipedia.org/wiki/Fran%C3%A7ois_Cotyhttp://en.wikipedia.org/wiki/Swiss_bankhttp://en.wikipedia.org/wiki/Swiss_bankhttp://en.wikipedia.org/wiki/Numbered_bank_accountshttp://en.wikipedia.org/wiki/ATTAChttp://en.wikipedia.org/wiki/Money_launderinghttp://en.wikipedia.org/wiki/Money_launderinghttp://en.wikipedia.org/wiki/Underground_economyhttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Privacyhttp://en.wikipedia.org/wiki/Underground_economyhttp://en.wikipedia.org/wiki/Money_launderinghttp://en.wikipedia.org/wiki/Money_launderinghttp://en.wikipedia.org/wiki/ATTAChttp://en.wikipedia.org/wiki/Numbered_bank_accountshttp://en.wikipedia.org/wiki/Swiss_bankhttp://en.wikipedia.org/wiki/Swiss_bankhttp://en.wikipedia.org/wiki/Fran%C3%A7ois_Cotyhttp://en.wikipedia.org/wiki/Peugeothttp://en.wikipedia.org/wiki/Germanyhttp://en.wikipedia.org/wiki/Patriotismhttp://en.wikipedia.org/wiki/Tax_evasionhttp://en.wikipedia.org/w/index.php?title=Fabien_Alberty&action=edit&redlink=1http://en.wikipedia.org/wiki/Federal_Act_on_Banks_and_Savings_Bankshttp://en.wikipedia.org/wiki/Federal_Act_on_Banks_and_Savings_Bankshttp://en.wikipedia.org/wiki/Capital_gains_taxhttp://en.wikipedia.org/w/index.php?title=Marutius&action=edit&redlink=1http://en.wikipedia.org/wiki/Singapore


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all Swiss bank accounts, includingnumbered bank accounts,are linked to anidentified individual. This law only permits a bank to share information with othersin cases of severe criminal acts, such as identifying a terrorist's bank account ortaxfraud,but not simple non-reporting of taxable income (calledtax evasion inSwitzerland). In April 2013, French MinisterJrme Cahuzac was forced to resignwhen the Geneva public prosecutor, acting quickly on a French request related totax fraud, found evidence of undeclared Swiss accounts.

Under pressure from theG20 and theOECD,the Swiss government announced inMarch 2009 that it will abolish the distinction betweentax fraud andtax evasion indealings with foreign clients. The distinction remains valid for domestic clients.Any bank employee violating a client's privacy could be punished quite severely

by law. After signing 12 new double taxation treaties in accordance with theinternational standard set by the OECD, Switzerland was removed from the grey

list of non-compliant tax jurisdictions.

In October 2013, the Swiss government stated that it intended to sign aninternational agreement sponsored by the OECD that, if ratified by Parliament, willalign Swiss bank practices with those of other countries and in effect end thespecial secrecy that clients of Swiss banks had enjoyed in the past.

After the revelations ofwhistleblowerBradley Birkenfeld in 2007, UBS wascaught red-handed by the United States government offering tax evasion strategies,sending undercover bankers with encrypted computers to the United States. After it

was caught, UBS paid a $780 million penalty and handed over hundreds of clientfiles to American authorities. In 2010, the Swiss and the United Statesgovernments negotiated an agreement allowing Swiss bank UBS to transmit to theUS authorities information concerning 4,450 American clients of UBS suspectedof tax evasion.

In the aftermath of the UBS and Julius Baer banking cases, some wealthy clientswho continue to use offshore accounts are turning to private banks in Singaporeand Hong Kong. In addition to the local Singapore or Hong Kong banks, officeshave been opened in those localities by a number of Swiss private banks. Themove to Singapore and Hong Kong is an alternative to the banking secrecy thatSwiss banks have come under attack for. Singapore has bank secrecy provisionscomparable to those in Switzerland. Although Hong Kong does not have the same

bank privacy laws, it offers flexibility in the creation of opaque companies that canserve as tax conduits.
http://en.wikipedia.org/wiki/Numbered_bank_accounthttp://en.wikipedia.org/wiki/Tax_evasion_in_Switzerland#Tax-related_criminal_lawhttp://en.wikipedia.org/wiki/Tax_evasion_in_Switzerland#Tax-related_criminal_lawhttp://en.wikipedia.org/wiki/Tax_evasion_in_Switzerlandhttp://en.wikipedia.org/wiki/Tax_evasion_in_Switzerlandhttp://en.wikipedia.org/wiki/J%C3%A9r%C3%B4me_Cahuzachttp://en.wikipedia.org/wiki/G20http://en.wikipedia.org/wiki/OECDhttp://en.wikipedia.org/wiki/Tax_fraudhttp://en.wikipedia.org/wiki/Tax_evasionhttp://en.wikipedia.org/wiki/Whistleblowerhttp://en.wikipedia.org/wiki/Bradley_Birkenfeldhttp://en.wikipedia.org/wiki/Bradley_Birkenfeldhttp://en.wikipedia.org/wiki/Whistleblowerhttp://en.wikipedia.org/wiki/Tax_evasionhttp://en.wikipedia.org/wiki/Tax_fraudhttp://en.wikipedia.org/wiki/OECDhttp://en.wikipedia.org/wiki/G20http://en.wikipedia.org/wiki/J%C3%A9r%C3%B4me_Cahuzachttp://en.wikipedia.org/wiki/Tax_evasion_in_Switzerlandhttp://en.wikipedia.org/wiki/Tax_evasion_in_Switzerlandhttp://en.wikipedia.org/wiki/Tax_evasion_in_Switzerland#Tax-related_criminal_lawhttp://en.wikipedia.org/wiki/Tax_evasion_in_Switzerland#Tax-related_criminal_lawhttp://en.wikipedia.org/wiki/Numbered_bank_account


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Manyoffshore banks,located intax havens such as in theCayman Islands andPanama,also have strict privacy laws

Tax evasion and money laundering

Jurisdiction with what other countries view are excessive protections benefittingdubious parties are sometimes known as secrecy havens, by analogy withtaxhavens.

Numbered bank accounts, used by Swiss banks and other offshore banks located intax havens, have been accused by NGOs such as ATTAC of being a majorinstrument of the underground economy, facilitating tax evasion and moneylaundering. AfterAl Capone's 1931 condemnation for tax evasion, according to

journalistLucy Komisar

mobsterMeyer Lansky took money fromNew Orleans slot machines and shifted itto accounts overseas. The Swiss secrecy law two years later assured him ofG-man-proof-banking. Later, he bought a Swiss bank and for years deposited hisHavana casino take in Miami accounts, then wired the funds to Switzerland via anetwork of shell andholding companies and offshore accounts

Joseph Stiglitz,2001Nobel laureate for economics, told Komisar:

You ask why, if there's an important role for a regulated banking system, do you

allow a non-regulated banking system to continue? It's in the interest of some ofthe moneyed interests to allow this to occur. It's not an accident; it could have beenshut down at any time. If you said the US, the UK, the majorG7banks will notdeal with offshore bank centers that don't comply with G7 banks regulations, these

banks could not exist. They only exist because they engage in transactions withstandard banks.

In 1999, aclass action suit against the Vatican Bank criticized the role ofSwitzerland duringWorld War II

Also in 1999, according to Lucy Komisar, banks "orchestrated a successful e-mailcampaign to Congress" to "sink a 'know your customer'regulation proposed by theFederal Deposit Insurance Corporation".

In 2001, the United States learned that the Swiss had protected the bank thathandled finances forOsama Bin Laden.One of them, theBahrain InternationalBank,had funds transiting through non-published accounts ofClearstream,which
http://en.wikipedia.org/wiki/Offshore_bankhttp://en.wikipedia.org/wiki/Tax_havenhttp://en.wikipedia.org/wiki/Cayman_Islandshttp://en.wikipedia.org/wiki/Panamahttp://en.wikipedia.org/wiki/Tax_havenshttp://en.wikipedia.org/wiki/Tax_havenshttp://en.wikipedia.org/wiki/Al_Caponehttp://en.wikipedia.org/wiki/Lucy_Komisarhttp://en.wikipedia.org/wiki/Meyer_Lanskyhttp://en.wikipedia.org/wiki/New_Orleans,_Louisianahttp://en.wikipedia.org/wiki/G-Man_%28slang%29http://en.wikipedia.org/wiki/G-Man_%28slang%29http://en.wikipedia.org/wiki/Holding_companyhttp://en.wikipedia.org/wiki/Joseph_Stiglitzhttp://en.wikipedia.org/wiki/Nobel_Prizehttp://en.wikipedia.org/wiki/G7http://en.wikipedia.org/wiki/Class_action_suit_against_the_Vatican_Bank_and_othershttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/Know_your_customerhttp://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporationhttp://en.wikipedia.org/wiki/Osama_Bin_Ladenhttp://en.wikipedia.org/w/index.php?title=Bahrain_International_Bank&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bahrain_International_Bank&action=edit&redlink=1http://en.wikipedia.org/wiki/Clearstreamhttp://en.wikipedia.org/wiki/Clearstreamhttp://en.wikipedia.org/w/index.php?title=Bahrain_International_Bank&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Bahrain_International_Bank&action=edit&redlink=1http://en.wikipedia.org/wiki/Osama_Bin_Ladenhttp://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporationhttp://en.wikipedia.org/wiki/Know_your_customerhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/Class_action_suit_against_the_Vatican_Bank_and_othershttp://en.wikipedia.org/wiki/G7http://en.wikipedia.org/wiki/Nobel_Prizehttp://en.wikipedia.org/wiki/Joseph_Stiglitzhttp://en.wikipedia.org/wiki/Holding_companyhttp://en.wikipedia.org/wiki/G-Man_%28slang%29http://en.wikipedia.org/wiki/G-Man_%28slang%29http://en.wikipedia.org/wiki/New_Orleans,_Louisianahttp://en.wikipedia.org/wiki/Meyer_Lanskyhttp://en.wikipedia.org/wiki/Lucy_Komisarhttp://en.wikipedia.org/wiki/Al_Caponehttp://en.wikipedia.org/wiki/Tax_havenshttp://en.wikipedia.org/wiki/Tax_havenshttp://en.wikipedia.org/wiki/Panamahttp://en.wikipedia.org/wiki/Cayman_Islandshttp://en.wikipedia.org/wiki/Tax_havenhttp://en.wikipedia.org/wiki/Offshore_bank


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has been qualified as a "bank of banks" and was involved in one ofLuxembourg'smajor financial scandals.

Taxation in Switzerland

taxes in Switzerlandare levied by theSwiss Confederation,thecantons and themunicipalities.Switzerland is sometimes considered atax haven due to its generallow rate oftaxation,its political stability as well as the various tax exemptions orreductions available to Swiss companies doing business abroad, or foreign personsresiding in Switzerland

Black money in Swiss banks

In early 2011, several reports Indian media alleged Swiss Bankers Associationofficials to have said that the largest depositors of illegal foreign money inSwitzerland are Indian These allegations were later denied by Swiss BankersAssociation as well as the central bank of Switzerland that tracks total depositsheld in Switzerland by Swiss and non-Swiss citizens, and by wealth managersasfudiciaries of non-Swiss citizens.

James Nason of Swiss Bankers Association in an interview about alleged blackmoney from India, suggests "The (black money) figures were rapidly picked up inthe Indian media and in Indian opposition circles, and circulated as gospel truth.

However, this story was a complete fabrication. The Swiss Bankers Associationnever said or published such a report. Anyone claiming to have such figures (forIndia) should be forced to identify their source and explain the methodology usedto produce them."

Supreme Court on black money

Notedjurist and former law ministerRam Jethmalani along with many other wellknown citizens filed aWrit Petition (Civil) No. 176 of 2009 in theSupreme Courtof India seeking the court's directions to help bring backblack money stashedintax havens abroad and initiate efforts to strengthen the governance framework to

prevent further creation ofblack money.

In January 2011, the (SC) asked why the names of those who have stashed moneyin the Liechtenstein Bank have not been disclosed. The court argued that thegovernment should be more forthcoming in releasing all available information onwhat it called a "mind-boggling" amount of money that is believed to be heldillegally in foreign banks.
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TheSC on 4 July 2011, ordered the appointment of a Special Investigating Team(SIT) headed by formerSCjudge BP Jeevan Reddy to act as a watch dog andmonitor investigations dealing with the black money. This body would report totheSC directly and no other agency will be involved in this. The two judge benchobserved that the failure of the government to control the phenomenon of blackmoney is an indication of weakness and softness of the government.

The issue of unaccounted monies held by nationals, and other legal entities, inforeign banks, is of primordial importance to the welfare of the citizens. Thequantum of such monies may be rough indicators of the weakness of the State, interms of both crime prevention, and also of tax collection. Depending on thevolume of such monies, and the number of incidents through which such moniesare generated and secreted away, it may very well reveal the degree of "softness ofthe State."

Justice B Sudershan Reddy and Justice S S Nijjar,Supreme Court of India,Source:

The government subsequently challenged this order throughInterlocutoryApplicationNo. 8 of 2011. The bench (consisting of JusticeAltamas Kabir in placeof Justice B Sudershan Reddy, since Justice Reddy retired) on 23 September 2011

pronounced a split verdict on whether government plea is maintainable.JusticeKabir said that the plea is maintainable while Justice Nijjar said it is not.Due to this split verdict, the matter will be referred to a third judge.

In April 2014,Indian Government disclosed to theSupreme Court the names of 26

people who had accounts in banks in Liechtenstein, as revealed to India by Germanauthorities. On 27 October 2014, Indian Government submitted name of three

people in an affidavit to the Supreme Court who have black money account inforeign countries. But on the very next day, Supreme Court of India orders centreGovernment to reveal all the names of black money account holders which theyhad received from various countries like Germany. The honorable bench of theSupreme court also asked the Centre not to indulge in any kind of probe rather just

pass the names to them and Supreme court will pass the order for further probe.

Following the order, Government of India submitted the names of 627 people in

theSupreme Court of India in a sealed envelope on 29 October 2014.Hasan Ali case

Hasan Ali Khan was arrested byEnforcement Directorate and the Income TaxDepartment on charges of stashing over 360 billion in foreign banks. ED lawyerssaid Khan had financed international arms dealerAdnan Khashoggi on severaloccasions.
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However, media sources claimed this case is becoming yet another perfect instanceof how investigative agencies like Income Tax Department go soft on high-profileoffenders. Ali's premises were raided by ED as far back as 2007. According severalnews reports, the probe against him has proceeded at an extremely slow pace andseems to have hit a dead end.

India Today claimed that it had verified a letter confirming the US$8 billion inblack money was in a Swiss bank UBS account, and the government of India toohas verified this with UBS. The Swiss bank UBS has denied Indian media reportsalleging that it maintained a business relationship with or had any assets oraccounts for Hasan Ali Khan accused in the US$8 billion black money case. Uponformal request by Indian and Swiss government authorities, the bank announcedthat the documentation supposedly corroborating such allegations were forged, andnumerous media reports claiming US$8 billion in stashed black money werefalse. India Today, in a later article, wrote, "Hasan Ali Khan stands accused ofmassive tax evasion and stashing money in secret bank accounts abroad. But the

problem is that the law enforcement agencies have precious little evidence to backtheir claims. For one, UBS Zurich has already denied having any dealings withKhan."

Estimates of Indian black money

As Schneider estimates, using the dynamic multiple-indicators multiple-causesmethod and by currency demand method, that the size of India's black moneyeconomy is between 23 to 26%, compared to an Asia-wide average of 28 to 30%,

to an Africa-wide average to 41 to 44%, and to a Latin America-wide average of41 to 44% of respective gross domestic products. According to this study, theaverage size of the shadow economy (as a percent of "official" GDP) in 96developing countries is 38.7%, with India below average.

Public protests and government's response

In May 2012, the Government of India published a white paper on black money. Itdisclosed India's effort at addressing black money and guidelines to prevent blackmoney in the future

India has following institutions already preventing, finding and investigatingunderground economy and black money

SwamiRamdev,popular as BabaRamdev is a Hindu swami and a yoga guru. He isa social activist and has staged protests against corruption in the country. He has

been associated with the 2011 Indian anti-corruption movement and also started hisBharat Swabhiman first phase Yatra with the pledge of disease free India and
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simultaneously to eradicate corruption and bring back black money from thebirthplace of Sri Krishna, Dwarika Gujrat on 2 September 2010. This yatra hasbeen through 25 states of India like rajasthan, Jammu Kashmir, Himachal Pradesh,Haryana, Uttar Pardesh, Jharkhand, Chhattisgarh, Orrisa, Assam West Bengal,Maharashta, Meghalaya and ends at the city of Mahakal Ujjain. On 20 SeptemberSwami Ramdev had started second phase of his yatra from the fort of Jhansi. Morethan 1 lakh people of Jhansi city had taken pledge to fight against corruption. On30 January 2011, a written representation of people from over 600 districts wassent to the Prime Minister which contained demand of bringing back black moneystashed abroad & putting an end to corruption, which was supported by all majorsocial, spiritual groups and organizations of the nation.Ramdev himself sent thesigned representation to the President of India through the District Magistrate ofBilaspur. Soon after on 27th Feb, 2011 he, organized a huge rally in RamlilaMaidan, Delhi which was attended by lakhs of people after which a written

representation was handed over to the President to bring back black money, on theday which marks the birth anniversary of freedom fighter Shaheed ChandrasekharAzad.Central Board of Direct Taxes: is a statutory authority functioning acrossIndia under the Central Board of Revenue Act of 1963. The Member(Investigation)of the CBDT,exercises control over theInvestigation Division of the Central Boardof Direct Taxes.The Member is a high ranking IRS officer of the rank of SpecialSecretary to the Government of India.The Member controls the:

Chief Commissioner of Income Tax Central.

Directorate General of Income Tax Investigation

Directorate of Income Tax Intelligence and Criminal Investigation.

The Director General of Income Tax (International Taxation) is in charge oftaxation issues arising from cross-border transactions and transfer pricing. Thisorganisation has been in operation for nearly 50 years, is primarily responsible forcombating the menace of black money, has offices in more than 800 buildingsspread over 510 cities and towns across India and has over 55,000 employees andeven employees who are deputed from premier police organisations to aid thedepartment.

Enforcement Directorate: was established in 1956. It administers the provisionsof the Foreign Exchange Regulation Act of 1973 (FERA), later updated to ForeignExchange Management Act of 1999 (FEMA). It is entrusted with the investigationand prosecution of money-laundering offences, confiscation of the proceeds ofsuch crime, matters related to foreign exchange market andinternational hawalatransactions. This India-wide directorate, with focus on majorfinancial centres in India, has 39 offices and 2000 employees.
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Financial Intelligence Unit: has been operating as a separate investigative entitysince 2004. This government organisation for receiving, processing, analysing, anddisseminating information relating to suspect financial transactions. It shares thisinformation with other ministries, enforcement and financial investigative agenciesof state and central government of India. Every month, it routinely examines about700,000 investigative reports and over 1,000 suspect financial transaction trails tohelp identify and stop black money and money laundering.

Central Board of Excise and Customs and Directorate of RevenueIntelligence: is the apex intelligence organisation responsible for detecting casesof evasion of central excise and service tax. The Directorate develops intelligence,especially in new areas of tax evasion through its intelligence network across thecountry and disseminates information across Indian government organisations byissuing Modus Operandi Circulars and Alert Circulars to apprise field formationsof the latest trends in tax evasion. It routinely arranges for enforcement operationsto research into the evasion of duty and taxes. The Directorate of RevenueIntelligence functions under the CBEC. It is entrusted with the responsibility ofcollection of data and information and its analysis, collation, interpretation anddissemination on matters relating to violations of taxation and customs law. Theorganisation has thousands of employees and is divided into seven zones all overIndia. It maintains close liaison with theWorld Customs Organisation,Brussels,the Regional Intelligence Liaison Office at Tokyo,INTERPOL,and foreigncustoms administrations.

Central Economic Intelligence Bureau: functions under India's Ministry of

Finance. It is responsible for coordination, intelligence sharing, and investigationsat national as well as regional levels amongst various law enforcement agencies to

prevent financial crimes, generation and parking of black money and illegaltransfers. This organisation maintains constant interaction with its CustomsOverseas Investigation Network (COIN) offices to share intelligence andinformation on suspected international financial transactions. The COIN officesgather evidence through diplomatic channels from the foreign custom offices andother foreign establishments to establish cases of mis-declaration to help identifyand stop tax evasion and money laundering.

In addition to the primary agencies listed above, India has 10 additional separatedepartments operating under the central government of India - such as NationalInvestigation Agency and National Crimes Record Bureau - to help locate,investigate and prosecute black money cases. Discovery and enforcement is alsoassisted by India'sCentral Bureau of Investigation and state police.
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In addition to direct efforts, the Indian central government coordinates its effortswith state governments with dedicated departments to monitor and stop corporatefrauds, bank frauds, frauds by non-banking financial companies, sales tax fraudsand income tax-related frauds.

MC Joshi committee on black moneyAfter a series of ongoingdemonstrations and protests across India,the governmentappointed a high-level committee headed by MC Joshi (the thenCBDT Chairman)in June 2011 to study the generation and curbing of black money. The committeefinalised its draft report on 30 January 2012. Its key observation andrecommendations were:

1.The two major national parties (an apparent reference toIndian NationalCongress,BJP) claim to have incomes of merely 5 billion (US$81 million)

and 2 billion (US$32 million). But this isn't "even a fraction" of theirexpenses. These parties spend between 100 billion (US$1.6 billion) and150 billion (US$2.4 billion) annually on election expenses alone.

2.Change maximum punishment underPrevention of Corruption Act from thepresent 3, 5 and 7 years to 2, 7 and 10 years rigorous imprisonment and alsochanges in the years of punishment in the Income Tax Act.

3.Taxation is a highly specialised subject. Based on domain knowledge, set upall-India judicial service and a National Tax Tribunal.

4.Just as the USAPatriot Act under which global financial transactions abovea threshold limit (by or with Americans) get reported to law enforcementagencies, India should insist on entities operating in India to report allglobal financial transactions above a threshold limit

5.Consider introducing anamnesty scheme with reduced penalties andimmunity from prosecution to the people who bring back black money fromabroad.

Tax Information Exchange Agreements

To curb black money, India has signed TIEA with 13 countries -Gibraltar,Bahamas,Bermuda,theBritish Virgin Islands,theIsle of Man,theCaymanIslands,Jersey,Liberia, Monaco,Macau,Argentina,Guernsey and Bahrain -where money is believed to have been stashed away. India and Switzerland, claimsa report, have agreed to allow India to routinely obtain banking information aboutIndians in Switzerland from 1 April 2011.

In June 2014, the Finance Minister Arun Jaitely on behalf of the Indiangovernment requested the Swiss Government to hand over all the bank details andnames of Indians having unaccounted money in Swiss banks.
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Proposals to prevent Indian black money

History

Even in colonial India, numerous committees and efforts were initiated to identifyand stop underground economy and black money with the goal of increasing the

tax collection by the British Crown government. For example, in 1936 AyersCommittee investigated black money from the Indian colony. It suggested majoramendments to protect and encourage the honest taxpayer and effectively deal withfraudulent evasion.

Methodological Issues and Estimates

THE methodologies used by various economists may be grouped in several ways.Acharya identifies five approaches:

(a) Fiscal Approaches;

(b) Monetary Approaches;

(c) Physical Input Approaches;

(d) Labour Market Approaches; and

(e) National Accounts Approaches.

He had provided the salient features of those methodologies and critically reviewedfour estimates of the size of the unaccounted economy of India(i) Chopra*; (ii)Gupta and Gupta*, (iii) Gupta and Mehta*, and (d) Ghosh, et al.*, using fourmethodologies, namely, (a), (b), (c), and (e), respectively. He had also examinedtwo other estimates(i) Kabra*; and (ii) Rangnekar*, which implicitly uses theFiscal Approach.

Gupta and Gupta* had reviewed the metho-dologies employed by researchers inseveral developed countries in order to identify the most appropriate one suitablefor India. They had been grouped into six approaches:

(a) National Accounts Method;

(b) Performance Rate Measures (or Labour Market Approach);

(c) Tax Evaluation Mattod (or, Fiscal Approach);


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(d) Survey Method;

(e) Nave Method; and

(f) Monetary Approach (Currency Demoni-tisation and Transaction Approach).

Apart from giving brief methodologies, Gupta and Gupta* had also presented therecently available estimates based on such methodologies in repect of severalcountries. They had concluded that the Transaction Approach developed by Fiege*is at present the most comprehensive in terms of its coverage of unrecordedactivities not necessarily all illegal. Their own exercise, made in 1982 and basedon Fieges* method, had been critically reviewed by Sandesara and Acharya*.

Tanzi* in his paper on the annual estimates (1930-1980) of the unaccountedeconomy in the US based on the variants of monetary appro-aches, had listed thevarious methodologies as under;

(a) Direct Measurement (Fiscal Approach);

(b) Questionnaire Method (or, Survey Method);

(c) Employment Statistics Method (Parti-cipation Rate Measure of Labour MarketApproach);

(d) National Accounts Method as well as Income-Consumption analysis of theHouse-hold Studies; and

(e) Monetary Approach (the Fixed Ration, Currency Denomination, and theCurrency Equation variants).

Estimates of the Indian Situation

SEVERAL Indian economists have also tried to put together the Indian

estimates to facilitate easy reference and comparison, for example, Acharya*,

Prasad*, Datt*. Acharya compared Wanchoo+, Chopra*, Gupta and Gupta*,(1983), Gupta and Mehta*, Ghosh et. al*, and Rangnekar*. Prasad* had

compared his own (based on his own model) with those of Wanchoo

Rangnekar*, Anita, Kaldor*, Datt* had dealt with Kaldor*, Wanchoo+,

Rangnekar*, Chopra*, and Gupta and Gupta* (1982)


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MOST of the non-methodological papers have generally focussed on the aboveissues. It may be worthwhile to document the wide range of views, some based onthe analysis of the current situation and several facts expressed and suggestionsmade. The factors contributing to the growth of the unaccounted economy thatrecur in many articles predictably include (a) unrealistic and irrational structure(including sales taxes, customs and excise duties); (b) proliferation of regulations(controls); (c) prohi-bition relating to underground activities (drug trafficking,illegal gambling); (d) political (and electoral) corruption; and (e) bureaucraticcorruption. Some authors have mentioned chan-ging social attitudes and erosion oftraditional values as the causes of the accumulation of black money.

As regards remedial measures and their evolution as a policy package, Datt* hadgrouped the various suggestions under two categories:

(a) within the framework of the mixed economy, black money can be limited andits size can be brought within manageable limits so that it does not pose a threat tothe very objectives of national economic policies; and

(b) the mixed economy is only a euphemism for the capitalist system and it is notpossible to control the black money within this frame-work.

Notwithstanding such divergent views, the remedial measures suggested are aimedat counteracting the causes listed in the relevant literature and include (a)rationalisation of the tax structure and regulatory measures; (b) demoniti-sation;

and (c) stringent penal measures to curb illegal activites. Since tax evasion isconsidered as the major source of generating black money, issues likerationalisation of the tax structure, efficient tax administration, and the recommen-dations of the Wanchoo Committee+ report dominate the literature.

The readers will find Kabra* and Datt* useful in having a reasonable overview ofthe various suggestions and opinions contained in the literature

Current ProposalsIn its white paper on black money, India has made the following proposals totackle its underground economy and black money.

Read WhitePaper_BackMoney2012

http://finmin.nic.in/reports/WhitePaper_BackMoney2012.pdf
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Reducing disincentives against voluntary compliance

Excessive tax rates increase black money and tax evasion. When tax rates approach100 per cent, tax revenues approach zero, because higher is the incentive for tax

evasion and greater the propensity to generate black money. The report finds thatpunitive taxes create an economic environment where economic agents are not leftwith any incentive to produce.

Another cause of black money, the report finds is the high transaction costsassociated with compliance with the law. Opaque and complicated regulations areother major disincentive that hinders compliance and pushes people towardsunderground economy and creation of black money. Compliance burden includesexcessive need for compliance time, as well as excessive resources to comply.

Lower taxes and simpler compliance process reduces black money, suggests thewhite paper

Banking transaction tax

BabaRamdev also known as Yoga guru outlined his policy prescription thatinvolves replacement of most direct and indirect levies with a banking transactiontax and de-monetisation of currency notes of Rs 500 and Rs 1,000 to help preventIndian black money, ease inflation, improve employment generation and alsolower corruption

Economic liberalisation

The report suggests that non-tariff barriers to economic activity such as permitsand licences, long delays in getting approvals from government agencies are anincentive to proceed with underground economy and hide black money. When onecan not obtain a licence to undertake a legitimate activity, the transaction costsapproach infinity, and create insurmountable incentives for unreported andunaccounted activities that will inevitably generate black money. The successivewaves of economic liberalisation in India since the 1990s have encouragedcompliance and taxes collected by the government of India have dramaticallyincreased over this period. The process of economic liberalisation must be

relentlessly continued to further remove underground economy and black money,suggests the report.

Reforms in vulnerable sectors of the economy

Certain vulnerable sectors of Indian economy are more prone to undergroundeconomy and black money than others. These sectors need systematic reforms. Asexample, the report offers gold trading, which was one of the major sources of
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black money generation and even crime prior to the reforms induced in that sector.While gold inflows into India have remained high after reforms, gold smuggling isno longer the menace as it used to be. Similar effective reforms of other vulnerablesectors like real estate, the report suggests can yield a significant dividend in theform of reducing generation of black money in the long term.

The real estate sector in India constitutes about 11 per cent of its GDP. Investmentin property is a common means of parking unaccounted money and a large numberof transactions in real estate are not reported or are under-reported. This is mainlyon account of very high levels of property transaction taxes, commonly in the formof stamp duty. High transaction taxes in property are one of the biggestimpediments to the development of an efficient property market. Real estatetransactions also involve complicated compliance and high transactions costs interms of search, advertising, commissions, registration, and contingent costsrelated to title disputes and litigation. People of India find it easier to deal with realestate transactions and opaque paperwork by paying bribes and through cash

payments and under-declaration of value. Unless the real estate transaction processand tax structure is simplified, the report suggests this source of black money will

be difficult to prevent. Old and complicated laws such as the Urban Land CeilingRegulation Act and Rent Control Act need to be repealed, property value limitsand high tax rates eliminated, while Property Title Certification systemdramatically simplified

Other sectors of Indian economy needing reform, as identified by the report,include equity trading market, mining permits, bullion and non-profit

organisations.

Creating effective credible deterrence

Effective and credible deterrence is necessary in combination with reforms,transparency, simple processes, elimination of bureaucracy and discretionaryregulations. Credible deterrence needs to be cost effective, claims the report. Suchdeterrence to black money can be achieved by information technology (integrationof databases), integration of systems and compliance departments of the Indiangovernment, direct tax administration, adding data mining capabilities, andimproving prosecution processes.

Supportive measures

Along with deterrence, the report suggests public awareness initiatives must belaunched. Public support for reforms and compliance are necessary for long termsolution to black money. In addition, financial auditors of companies have to bemade more accountable for distortions and lapses. The report suggestsWhistleblower laws must be strengthened to encourage reporting and tax recovery.


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Amnesty

Amnesty programmes have been proposed to encourage voluntary disclosure bytax evaders. These voluntary schemes have been criticized on the grounds that they

provide a premium on dishonesty and are unfair to honest taxpayers, as well as for

their failure to achieve the objective of unearthing undisclosed money. Thereport suggests that such amnesty programmes can not be an effective and lastingsolution, nor one that is routine.

International enforcement

India has Double Tax Avoidance Agreements with 82 nations, including allpopular tax haven countries. Of these, India has expanded agreements with 30countries which requires mutual effort to collect taxes on behalf of each other, if acitizen attempts to hide black money in the other country. The report suggests thatthe Agreements be expanded to other countries as well to help with enforcement.

Modified Currency Notes

Government printing of such legal currency notes of highest denomination i.e.;1000 (US$16) and 500 (US$8.10) which remain in the market for only 2 years.After a 2-year period is expired there should be a one year grace period duringwhich these currency notes should be submitted and accepted only in bankaccounts. Following this grace period the currency notes will cease to be acceptedas legal tender or destroyed under the instructions of The Reserve Bank of India.As a consequence turning most of the unaccountable money into accountable andtaxable money

Developments So Far

The Government of India had earlier appointed a number of Commissions andCommittees to look into the matter. Appendix II gives a list. It includes a report

prepared by a distinguished economist Nicholas Kaldor* who was invited by thethen Prime Minister, Jawaharlal Nehru, to make an assessment of the Indiansituation. Kaldor submitted the report in 1956. However, it is the WanchooCommittee Report (1971)+, which got wide publicity because of the persistentcriticism of the CPI-M MP, Jyotirmoy Bosu, in Parliament of the total failure of

the government to implement the recommendations of the earlier Commissions andCommittees

In August 2010, the government revised the Double Taxation AvoidanceAgreement to provide means for investigations of black money in Swiss banks.This revision, expected to become active by January 2012, will allow the
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government to make inquiries of Swiss banks in cases where they have specificinformation about possible black money being stored in Switzerland.

In 2011, the Indian government received the names of 782 Indians who hadaccounts withHSBC.As of December, 2011, the Finance Ministry has refused to

reveal the names, for privacy reasons, though they did confirm that no currentMembers of Parliament are on the list. In response to demands from theBharatiyaJanata Party (BJP) opposition party for the release of the information, thegovernment announced on 15 December that, while it would not publish thenames, it would publish a white paper about the HSBC information

According to White Paper on Black Money in India report, published in May 2012,Swiss National Bank estimates that the total amount of deposits in all Swiss banks,at the end of 2010, by citizens of India were CHF 1.95 billion (INR 92.95 billion,US$2.1 billion). The Swiss Ministry of External Affairs has confirmed these

figures upon request for information by the Indian Ministry of External Affairs.This amount is about 700 fold less than the alleged $1.4 trillion in some mediareports.

In February 2012, the director of theCentral Bureau of Investigation said thatIndians have $500 billion of illegal funds in foreign tax havens, more than anyother country. In March 2012, the Government of India clarified in its parliamentthat the CBI Director's statement on $500 billion of illegal money was an estimate

based on a statement made to India's Supreme Court in July 2011.

In February 2012,Central Bureau of Investigation (CBI) director A P Singhspeaking at the inauguration of firstInterpol global programme on anti-corruptionand asset recovery said: "It is estimated that around 500 billion dollars of illegalmoney belonging to Indians is deposited in tax havens abroad. Largest depositorsin Swiss Banks are also reported to be Indians". In a hint at scams involvingministers, Singh said: "I am prompted to recall a famous verse from ancient Indian

scriptures, which says. In other words, if the King is immoral

so would be his subjects" The CBI Director later clarified in India's parliament thatthe $500 billion of illegal money was an estimate based on a statement made toIndia's Supreme Court in July 2011.

After formal inquiries and tallying data provided by banking officials outsideIndia, the Government of India claimed in May 2012 that the deposits of Indians inSwiss banks constitute only 0.13 per cent of the total bank deposits of citizens of
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all countries. Further, the share of Indians in the total bank deposits of citizens ofall countries in Swiss banks has reduced from 0.29 per cent in 2006 to 0.13 percent in 2010.

The through theInvestigation Division of the Central Board of Direct

Taxes released a White Paper on Black Money giving the Income Tax Departmentincreased powers.

Recent developments:

The Centre has submitted a list of 627 Indians who have accounts in HSBC bank,Geneva, to the Supreme Court on Wednesday, directing a special investigationteam (SIT) to complete the tax probe on suspected black money by March nextyear.

Prime Minister Narendra Modi says he wants to prosecute tax dodgers and bringmoney stashed in tax havens back into the country but his opponents claim enough

progress has not been made since his landslide election victory earlier this year.

Here's the ten developments since the National Democratic Alliance (NDA)government took charge at the Centre in May this year:

1. May 27: Modi govt forms SIT

Signalling his governments resolve to bring back the countrys black money

stashed abroad, PM Modis first decision in the maiden meeting of his cabinet wasto form a high-profile SIT to unearth illicit money.

The SITis headed by former SC judge MB Shah and includes the highest-levelofficials from financial and economic departments as well as law enforcementagencies.

The decision came just a day before the apex courts deadline to form the SIT wasset to expire.

2. Oct 17: 'Black money info cannot be disclosed to all'

The Centre on October 17 told the SC that it could notdisclose the names of thosewho have deposited money in banks abroad as it this would jeopardise taxagreements with nations providing those names to India.
http://en.wikipedia.org/wiki/Investigation_Division_of_the_Central_Board_of_Direct_Taxeshttp://en.wikipedia.org/wiki/Investigation_Division_of_the_Central_Board_of_Direct_Taxeshttp://www.hindustantimes.com/india-news/modi-govt-forms-sit-on-black-money/article1-1223438.aspx#_blankhttp://www.hindustantimes.com/india-news/modi-govt-forms-sit-on-black-money/article1-1223438.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-information-cannot-be-disclosed-to-all-centre-tells-supreme-court/article1-1276316.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-information-cannot-be-disclosed-to-all-centre-tells-supreme-court/article1-1276316.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-information-cannot-be-disclosed-to-all-centre-tells-supreme-court/article1-1276316.aspx#_blankhttp://www.hindustantimes.com/india-news/modi-govt-forms-sit-on-black-money/article1-1223438.aspx#_blankhttp://en.wikipedia.org/wiki/Investigation_Division_of_the_Central_Board_of_Direct_Taxeshttp://en.wikipedia.org/wiki/Investigation_Division_of_the_Central_Board_of_Direct_Taxes


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This echoes the line taken by the previous United Progressive Alliancegovernment, which the BJP had slammed over alleged inaction on the issue andmade it into an election issue earlier this year.

Appearing before a bench headed by Chief Justice HL Dattu, Attorney generalMukul Rohatgi said that all amounts deposited in foreign banks by Indian citizenscannot be termed black money and that it is not a crime to open such accounts.

However, finance minister Arun Jaitley rejected any notion that the BJP wasreluctant to make the names public.

3. Oct 17: FM says Switzerland agrees to provide details of black money

Jaitley said that Switzerland had agreed to share information on Indians bankaccounts on independent evidence provided in each case, marking a major step inefforts to secure data from the Alpine nation, known for its banking secrecy laws.

Jaitley saidSwitzerland had agreed to share information related to HSBC andLiechestein lists of account holders, provided there is independent evidencecollected by Indian authorities.

As per Swiss National Bank's latest data, the total money held by Indians in Swissbanks stood at over Rs. 14,000 crore as on December 2013, up by nearly 42% from

a year ago.

4. Oct 27: Govt discloses eight names to SC

Days after it was criticised for backtracking on its election promise to bring backblack money stashed abroad, the Modi governmentnamed seven persons and acompanyfacing prosecution for keeping illegal wealth in foreign banks.

The much-awaited list did not include names of any politician. Those named in a

government affidavit were Pradip Burman of the Dabur group, Rajkot-basedbullion trader Pankaj Chimanlal Lodhya and directors of Goa-based miningcompany Timblo Private LimitedRadha Satish Timblo, Chetan S Timblo,Rohan S Timblo, Anna C Timblo and Mallika R Timblo. Timblo Private Limited,a firm identified by Association for Democratic Reforms as a donor to both theBJP and the Congress, was also named.
http://www.hindustantimes.com/india-news/switzerland-agrees-to-provide-details-of-black-money-jaitley/article1-1276592.aspx#_blankhttp://www.hindustantimes.com/india-news/switzerland-agrees-to-provide-details-of-black-money-jaitley/article1-1276592.aspx#_blankhttp://www.hindustantimes.com/india-news/switzerland-agrees-to-provide-details-of-black-money-jaitley/article1-1276592.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-govt-discloses-3-names-to-sc-politicians-not-on-list-for-now/article1-1279250.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-govt-discloses-3-names-to-sc-politicians-not-on-list-for-now/article1-1279250.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-govt-discloses-3-names-to-sc-politicians-not-on-list-for-now/article1-1279250.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-govt-discloses-3-names-to-sc-politicians-not-on-list-for-now/article1-1279250.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-govt-discloses-3-names-to-sc-politicians-not-on-list-for-now/article1-1279250.aspx#_blankhttp://www.hindustantimes.com/india-news/black-money-govt-discloses-3-names-to-sc-politicians-not-on-list-for-now/article1-1279250.aspx#_blankhttp://www.hindustantimes.com/india-news/switzerland-agrees-to-provide-details-of-black-money-jaitley/article1-1276592.aspx#_blank


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5. Oct 27: Oppn slams BJP for calling affidavit historic

Political reactions were sharpafter the government revealed the names of sevenpersons and a company facing prosecution for keeping illegal wealth in foreignbanks.

Sambit Patra, a BJP spokesperson, called disclosure of the names "a historic day inthe black money case".

But Congress general secretary Digvijaya Singh accused the BJP of "selectiverevelation" of names and said the process smacked of "blackmail, not blackmoney".

AAP leader Arvind Kejriwal said the revelations of black money account holdersshould not be selective. "There should not be selective revelation of names. The

big fish are being let off," he told the media.

Congress spokesperson Abhishek Manu Singhvi cited four tweets by Modi beforethe Lok Sabha elections in which he had slammed the previous Manmohan Singhgovernment for its lack of commitment to bring back black money from foreign

banks.

6. Oct 28: SC pulls up Centre

The apex court directed the government to submit to it thenames of all foreignbank account holdersby Oct 29, saying it need not provide a protectiveumbrella to such persons.

The court also turned down the governments request that it modify its orderseeking the names of all such account holders. The Centre had contended that thenames should be revealed only after investigations proved the accounts indeed held

black money and led to prosecution against tax evaders.

7. Oct 29: Centre gives black money full list to SC

The government submitted a list of 627 Indiansholding accounts in HSBCBank, Geneva, to the court, which directed its SIT to examine them and takeappropriate action.
http://www.hindustantimes.com/india-news/names-out-in-black-money-case-bjp-calls-it-historic-but-congress-claims-blackmail/article1-1279481.aspx#_blankhttp://www.hindustantimes.com/india-news/names-out-in-black-money-case-bjp-calls-it-historic-but-congress-claims-blackmail/article1-1279481.aspx#_blankhttp://www.hindustantimes.com/india-news/reveal-all-names-in-black-money-list-sc-tells-centre/article1-1279820.aspx#_blankhttp://www.hindustantimes.com/india-news/reveal-all-names-in-black-money-list-sc-tells-centre/article1-1279820.aspx#_blankhttp://www.hindustantimes.com/india-news/reveal-all-names-in-black-money-list-sc-tells-centre/article1-1279820.aspx#_blankhttp://www.hindustantimes.com/india-news/reveal-all-names-in-black-money-list-sc-tells-centre/article1-1279820.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/india-news/reveal-all-names-in-black-money-list-sc-tells-centre/article1-1279820.aspx#_blankhttp://www.hindustantimes.com/india-news/reveal-all-names-in-black-money-list-sc-tells-centre/article1-1279820.aspx#_blankhttp://www.hindustantimes.com/india-news/names-out-in-black-money-case-bjp-calls-it-historic-but-congress-claims-blackmail/article1-1279481.aspx#_blank


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After handing over a sealed envelope, attorney general Mukul Rohatgi said itcontained three documentsthe governments correspondence with the Frenchgovernment, the list of names and a status report.

8. Oct 29: No revelation, for now

A special bench of the apex court headed Datturefused to open the envelopehanding over by the Centre, saying it would be done by the SIT chairman and vice-chairman.

We dont want to open these papers and embarrass anyone. That has never beenour intention, it said.

Scheduling the next hearing for December 3, it asked the SIT to submit a statusreport by November 30 after ascertaining who had black money accounts abroad.

9. Oct 29: State of confusion

On Tuesday, the top court directed the government to submit the full list after thelatter said it wasnt possible to make the names of all foreign bank account holders

public. Rejecting the Centres submission, the CJI said, If it breachesconfidentiality, let it be so.

But on Wednesday,the court refused to open the sealed envelopewhichcontained the list of foreign account holders.

It was also not clear why the court insisted on getting the list from the governmentwhen the latter had submitted it to the court-appointed SIT in June.

The Centre, meanwhile, was allowed by the court to raise its objections againstmaking all the names public before the SIT.

10. Oct 30: What's next

The SC-appointed SIT, looking into the black money cases, on Thursday saiditwill go after the offenders"big or small" but made it clear that confidentialityabout account holders abroad will not be violated.
http://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/black-money-sit-says-whoever-has-looted-india-will-be-caught-and-punished/article1-1280564.aspx#_blankhttp://www.hindustantimes.com/business-news/black-money-sit-says-whoever-has-looted-india-will-be-caught-and-punished/article1-1280564.aspx#_blankhttp://www.hindustantimes.com/business-news/black-money-sit-says-whoever-has-looted-india-will-be-caught-and-punished/article1-1280564.aspx#_blankhttp://www.hindustantimes.com/business-news/black-money-sit-says-whoever-has-looted-india-will-be-caught-and-punished/article1-1280564.aspx#_blankhttp://www.hindustantimes.com/business-news/black-money-sit-says-whoever-has-looted-india-will-be-caught-and-punished/article1-1280564.aspx#_blankhttp://www.hindustantimes.com/business-news/black-money-sit-says-whoever-has-looted-india-will-be-caught-and-punished/article1-1280564.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blankhttp://www.hindustantimes.com/business-news/centre-to--disclose-black-money-full-list-to-sc-today-/article1-1279996.aspx#_blank


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It also said it was gathering more names other than the over 600 account holders inHSBC bank, Geneva, given by the government to the apex court on Wednesday,for investigation.

"Before us, nobody is big, nobody is small. Everybody is equal. Whoever haslooted this country will be caught and will be punished, economically andotherwise also. That we assure. Both of us (SIT chief Justice Shah) are too wellknown for doing it to discomfort of many people," vice chairman Justice ArijitPasayat said.

The SIT was asked to complete the probe by next March.

India`s Black Money in Swiss Bank

http://myeconomist.wordpress.com/indias-black-money-in-swiss-bank/

This is not so surprising .India is the world`s most corrupt country.Corruption isnot new in India.Recently due to international pressure, Swiss government agreedto disclose the names of the account holders only if the respective governmentformally asked for it.

Black money inSwiss banksSwiss Banking Associationreport, 2006 details

bank deposits in the territory of Switzerland by nationals of followingcountries:

Top fiveIndia- $1,456 billion

Russia$ 470 billion

UK -$390 billion

Ukraine$100 billion

China$ 96 billion

India has more money inSwiss bankthan all the other countries combined.Second

best Russia has 4 times lesser deposit. US is not even there in the counting in topfive.

609 people in India having legal property more than Rs- 100 crores (Rs- 10

Million). Indian President one day living cost is Rs-8 crore, living in a place

where 350 flats.One day Indian Parliament running cost is around 9 crore

Rupees.Britishers looted 350 Lakh Crore in 250 years whereas Indian himself
http://myeconomist.wordpress.com/indias-black-money-in-swiss-bank/http://myeconomist.wordpress.com/indias-black-money-in-swiss-bank/http://www.ubs.com/http://www.ubs.com/http://www.ubs.com/http://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCYQFjAA&url=http%3A%2F%2Fwww.swissbanking.org%2Fen%2Fhome.htm&ei=vFVGTaazFJHIrQfIpvAP&usg=AFQjCNEwbPNosroDs15RbaHescJHm48o7ghttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCYQFjAA&url=http%3A%2F%2Fwww.swissbanking.org%2Fen%2Fhome.htm&ei=vFVGTaazFJHIrQfIpvAP&usg=AFQjCNEwbPNosroDs15RbaHescJHm48o7ghttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCYQFjAA&url=http%3A%2F%2Fwww.swissbanking.org%2Fen%2Fhome.htm&ei=vFVGTaazFJHIrQfIpvAP&usg=AFQjCNEwbPNosroDs15RbaHescJHm48o7ghttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCcQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FBanking_in_Switzerland&ei=ZhJETer3BIfLrQfHn_XqDw&usg=AFQjCNH62an6bWdht4sK8trprOaJfHhlTghttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCcQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FBanking_in_Switzerland&ei=ZhJETer3BIfLrQfHn_XqDw&usg=AFQjCNH62an6bWdht4sK8trprOaJfHhlTghttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCcQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FBanking_in_Switzerland&ei=ZhJETer3BIfLrQfHn_XqDw&usg=AFQjCNH62an6bWdht4sK8trprOaJfHhlTghttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCcQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FBanking_in_Switzerland&ei=ZhJETer3BIfLrQfHn_XqDw&usg=AFQjCNH62an6bWdht4sK8trprOaJfHhlTghttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCYQFjAA&url=http%3A%2F%2Fwww.swissbanking.org%2Fen%2Fhome.htm&ei=vFVGTaazFJHIrQfIpvAP&usg=AFQjCNEwbPNosroDs15RbaHescJHm48o7ghttp://www.ubs.com/http://myeconomist.wordpress.com/indias-black-money-in-swiss-bank/


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looted 330 crore. 70 Lakh crore only deposited in swiss bank. 84000 corrupt

people in India.India has around 450 Billion dollar of coal deposit & 170

billion of iron ore deposit,looted by state politicians .According to Indian

Government around 1 Lakh place in India where people doing illegal mining.

Dishonest persons, scandalous politicians and corruptIAS,IPSofficers havedeposited in foreign banks in their illegal personal accounts a sum of about $ 1500

billion, which have been misappropriated by them. From 2003 to 2010 out of 5,635IPS officersfifty(50) IPS officers were resigned and joined private company.

This amount is about 13 times larger than the countrys foreign debt. With thisamount 45 crore poor people can get Rs 1,00,000 each. This huge amount has beenappropriated from the people of India by exploiting and betraying them.

Some 80,000 people travel to Switzerland every year, of whom 25,000 travelvery frequently.Obviously, these people wont be tourists.

Why our Indian Government is not asking to swiss Bank? Well the answer is

simple , our Government is working under the influence of those politicians &

industrialists who have huge deposit in Swiss bank.They cann`t expose their

own people.

USA have settled their Swiss bank Account & their top Billionares in their

countries paid to their country 50% of their Money which includes Gates &

Bloomberg.Italy got 6.4 Billion dollar from swiss Bank,Germany got 5.7Billion dollar from swiss Bank & France got 1.7 Billion dollar from swiss

Bank.

Schweitzer I ll ustr ierte,a Swiss news magazine,published on 19th November 1991,has alleged in an old issue that the Soviet intelligence agencyKGB had depositedUS $2.2billion in a Swiss bank account in 1985in the minor account of RahulGandhimanaged by his mother Sonia Gandhi . Janata PartyPresidentDrSubramanian Swamy, who had secured an order from the Delhi High Court to theCBI to investigate alleged receipt of slush money by late former Prime MinisterRajiv Gandhis family, has cited a November 1991 issue of the Swiss magazineinsupport of his charge.He has further claimed that the payments were authorized byCPSU by a resolution CPSU/CC/No 11228/3 dated 20/12/1985and the same wasalso endorsed by the USSR Council of Ministers in Directive No 2633/Rs dated20/12/1985. He also claimed that these payments had been coming since 1971 asthe payments received by Sonia Gandhis family have been audited in CPSU/CC
http://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCIQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FIndian_Administrative_Service&ei=iVRGTcaDOIfTrQfJ9pHuDw&usg=AFQjCNGgiBDokp9G9hiNYOA7oBvbIC7qOQhttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCIQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FIndian_Administrative_Service&ei=iVRGTcaDOIfTrQfJ9pHuDw&usg=AFQjCNGgiBDokp9G9hiNYOA7oBvbIC7qOQhttp://en.wikipedia.org/wiki/Indian_Police_Servicehttp://en.wikipedia.org/wiki/Indian_Police_Servicehttp://en.wikipedia.org/wiki/Indian_Police_Servicehttp://en.wikipedia.org/wiki/Sonia_Gandhihttp://en.wikipedia.org/wiki/Sonia_Gandhihttp://expressbuzz.com/opinion/columnists/zero-tolerance-secret-billions/236261.htmlhttp://expressbuzz.com/opinion/columnists/zero-tolerance-secret-billions/236261.htmlhttp://expressbuzz.com/opinion/columnists/zero-tolerance-secret-billions/236261.htmlhttp://expressbuzz.com/opinion/columnists/zero-tolerance-secret-billions/236261.htmlhttp://en.wikipedia.org/wiki/Sonia_Gandhihttp://en.wikipedia.org/wiki/Indian_Police_Servicehttp://http/www.google.co.in/url?sa=t&source=web&cd=1&ved=0CCIQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FIndian_Administrative_Service&ei=iVRGTcaDOIfTrQfJ9pHuDw&usg=AFQjCNGgiBDokp9G9hiNYOA7oBvbIC7qOQ


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resolution No 11187/22 OP dated 10/12/1984. Reference:http://swissprivacy.tripod.com/id8.html

Why Government is not taking action on corrupt peoples ? Why CBI is notindependently working?well answer is simple ,Government is taking lots ofmoney in the name of party fund and also taking help from those politicians whoare involved incriminal charges.Whole police in India is working under politicians. According toRBI (Reserve Bank Of I ndia) Rupees 17,18,826 crore notes pr in t in I ndia

between year 2000-2010. Rupees 10 Lakh Crore money inci rculation in I ndia.

Generall y 2-3 % of GDP money cir culation in other countr ies. But I ndian

Government has allowed four Swiss bank & Eight Bank of I taly in I ndia.

Sources says that NGO is also engaged in converting black money into white

Money.

swiss bank(ubs) revealed 6000 USA people names . In may 2008 Germany

bank revealed 28 people names but government is still hiding their names.

Even theSupreme court of India asked for names three times.But

Government only make deal with 23 countries of Double Taxation.

USA got his money, France , Italy , countries like

Singapore fought and get their money.India has more than 3.5 crore

taxpayers. Black Money can be used by terrorists. Probably they are trying to

move money to other countries or will invest in real-estate like in dubai or

arab countries.After huge pressure from media & civil society Governmenthas joined FATA (Financial Action Task Force) group only to delay issue.

http://indiatoday.intoday.in/site/Story/126998/LATEST%20HEADLINES/ind

ian-link-to-swiss-money-trail-revealed.html In the data shared by Ex-Swiss banker Rudolf Elmer, there are at least threecompanies that go by the name ofAnnapurna.These accounts have been openedin the New York branch of the Swiss Bank Julius Baer.These accounts areAnnapurna Convertible Ltd, account number 420331. Annapurna Leverage Ltd,account number 427039 .Annapurna Convertible USD, account number431916.Money running into crores of rupees has been stashed away in theseaccounts.57 million dollars or Rs 259 crore have been stashed away in AnnapurnaConvertible ltd. 18.6 million dollars or Rs 84 crore are lying in AnnapurnaLeverage Limited.And 10.3 million dollars or Rs 45 crore are hidden away in theaccount of Annapurna Convertible.Interestingly, the documents list the samecompany and same person as managing all the Annapurna accounts.Annapurna
http://swissprivacy.tripod.com/id8.htmlhttp://swissprivacy.tripod.com/id8.htmlhttp://swissprivacy.tripod.com/id8.htmlhttp://www.hindustantimes.com/833-NGOs-blacklisted-for-misappropriation-of-funds/H1-Article1-488589.aspxhttp://www.hindustantimes.com/833-NGOs-blacklisted-for-misappropriation-of-funds/H1-Article1-488589.aspxhttp://www.hindustantimes.com/833-NGOs-blacklisted-for-misappropriation-of-funds/H1-Article1-488589.aspxhttp://www.google.co.in/url?sa=t&source=web&cd=1&ved=0CB0QFjAA&url=http%3A%2F%2Fibnlive.in.com%2Fnews%2Fwill-sc-reveal-names-of-swiss-bank-ac-holders%2F140943-3

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