Tuesday, February 5, 2013

Black Money and Tax Evasion

In order to check black money and tax evasion, an online databank is being set up by the finance ministry for effective coordination and dissemination of various inputs pertaining to illegal funds.
The online system, which would act as a databank for financial intelligence sleuths, is named Virtual Office. It will help in the monitoring of suspicious transaction reports (STRs) generated by the Financial Intelligence Unit- India ( FIU- Ind), an agency tasked with receiving, analysing and disseminating information relating to suspect financial transactions to enforcement agencies and its foreign counterparts.
It will have a representative each from Central Board of Direct Taxes, Directorate General of Revenue Intelligence, Central Economic Intelligence Bureau, Directorate General of Central Excise Intelligence and FIU- Ind.
India has lost a whopping $123 billion in black money during the last decade, according to a report by a US- based research and advocacy organisation on ‘ Illicit Financial Flows from Developing Countries: 2001: 2010’.
As many as 13,871 STRs were disseminated by the FIU- Ind during financial year2011- 12.
Of these, 10,956 were passed on to CBDT, 1,615 to the Enforcement Directorate, 1,130 were shared with CBEC, DRI and DGCEI, 117 STRs with Securities and Exchange Board of India, 51 with Reserve Bank of India and two with Insurance Regulatory and Development Authority.
An STR is a transaction, of ₹ 10 lakh and above, which gives rise to a reasonable ground of suspicion that it may involve the proceeds of a crime through drug trafficking, gun running, and illegal imports and exports of goods.


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