‘Watchman’ Govt keeping close lookout for overseas black money entering India

Yogaguru Baba Ramdev may be smiling his trademark way and so might be social activist Anna Hazare as their dream and struggle to bring black money back from tax haven may soon come true. As per the finance ministers Arun Jaitley’s prescription, the government has strengthened its vigil to ensure that illicit funds parked overseas are not brought back into the country through trade and other routes before the harsh black money law gets imposed. A recent Economic Times reports suggests that agencies under the finance ministry will keep a close watch on trade flows over the next few months as over-invoicing is rampantly being used to legally bring funds back in India.

Since most people with black money stashed overseas follow traditional channels of gold and diamond shipments, finance minister is preparing for a stricter monitoring regularly.

In the annual budget this year, Jaitley had proposed to bring customs offences such as false declaration and false documents under the money-laundering act.

Revenue agencies have already detected a rise in trade-based laundering with multiple modus operandi -- such as the export and import of low-value goods that are declared high-value items -- being employed to bring funds into the country.

According to the financial daily, there is a sudden jump in export turnover or increase in import volumes could trigger an alarm, which authorities have now greater powers to investigate and prosecute.

In a bid to speed up the process, Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 has been passed last month. The law requires residents to disclose foreign income and assets from the assessment year beginning April 1, 2016, and prescribes stiff monetary penalty and imprisonment up to 10 years for failure to do so.