India and Black Money

Information received on funds stashed away by Indians in foreign banks and other tax havens cannot be disclosed in the absence of a legal framework.

Nevertheless,the Income Tax authorities are in a position to prosecute cases against tax evaders during which they'll be known.

P.Chidambaram has come up with five-pronged strategy to combat the menace of illicit funds generated both as a result of tax evasion and corruption.

1.Joining the global crusade against black money

2.Creating an appropriate legislative framework

3.Setting up institutions for dealing with illicit funds

4.Developing systems for implementation

5.Imparting skills to the manpower for effective action.

Double Taxation Avoidance Agreements (DTAAs) and the Tax Information Exchange Agreements (TIEAs) are the “two instrumentalities” under which information on illicit funds can be obtained from sovereign governments and other “tax haven” jurisdictions.