Sizable dip in Indian black money parked abroad: FM Jaitley

Ahmedabad: Finance Minister Arun Jaitley today said the Narendra Modi government's "activism" against black money in the last two years has resulted into a "sizable dip" in illegal assets stashed abroad by Indians.

He also said the action being initiated by G-20 countries coupled with "technological intervention" will make it difficult to keep black money both at home and outside the country.

"Today there is a panic among people who hold illegal assets outside the country. If you take from 1947 to 2014, the cumulative effect of all steps taken would not be even minuscule percentage of what the government has done in the last two years," Jaitley said.

He was speaking at a programme here to sensitise people on government's Income Declaration Scheme (IDS) whereby tax evaders are given opportunity to disclose their unaccounted income and pay 45 percent of it, which is applicable till September 30.

"Recent reports have indicated that there is a sizable dip in Indian holdings outside the country," the minister said.

"If you consider the kind of activism in the last two years, the first decision that PM Narendra Modi took was to accept the direction of the Supreme Court and constitute SIT with two retired SC judges," he said.

Jaitley added that government's collective efforts, including making available a compliance window for black money and taking action based on the HSBC, International Consortium of Investigative Journalists (ICIJ) and Panama Papers disclosures, have helped in bringing back the illegal wealth stashed abroad, "with many (people) even facing trial".

"We first took steps to provide chance to those who keep country's assets abroad to bring it back home and pay for the same. Information about HSBC accounts has been assessed and people are prosecuted....Around Rs 8,000 crore has been detected.

"Next, ICIJ made big disclosure in which Indians were found putting abroad Rs 5,000 crore. Many will be prosecuted. Now, Panama papers are being revealed, on the basis of which those who have kept illegal assets can be prosecuted as per new law," he said.

In May this year, nearly 2,000 individuals, entities and addresses with links to India figured in the latest edition of 'Panama Papers' giving information on offshore holding of companies in tax havens.

Jaitley said the technological progress in coming times will make it difficult to generate and spend domestic black money.

"Once GST (Goods and Services Tax) is implemented, all transactions will be cross-verified, whether they are goods, or services," he said

Jaitley said G-20 countries have decided to cooperate with each other, and by 2017 real-time information will be available of people with assets abroad "which will make people avoid being secretive for the fear of being declared non-compliant".

He said IDS is an opportunity for people to become compliant tax-payers.

"If these experiments become successful, these are tax friendly measures under which tax department should learn to trust assessee and take forward tax reforms...To make this entire system strong and perfect is a step forward in this direction," the minister said.

Observing that IDS is a part of the government's efforts to move towards "ideal tax system", he said many new experiments are being done in this direction.

"Today, around 94 percent tax returns come in digital mode. We are trying to take this system further so that any queries that tax payers have from the department should be done through email.

Personal interaction between the assessor and assesse should be the least," Jaitley added.