FM: Income Tax recovers Rs 25,000 cr undisclosed income in last 2 yrs
March, 14th 2011
Finance Minister Pranab Mukherjee today said the income tax department has recovered undisclosed income of Rs 25,000 crore in the last two years during its search and seizure operations.
"...in Income Tax Act there is regular provision for search and seizure. And this year search and seizure when we intensified, we have got undisclosed income of Rs 25,000 crore in last 24 months and out of that Rs 7,000 crore additional taxes have been realised," Mukherjee said while replying to the discussion on the General Budget 2011-12 in Lok Sabha.
Besides, the revenue department has detected about Rs 33,784 crore through the transfer pricing mechanism.
Transfer pricing is a technique where parent companies sell goods and services to subsidiary entities at an inflated price to deliberately reduce profits and tax liability.
The law requires that goods and services should be sold to subsidiary companies at arm's length price -- the price at which goods are traded between unconnected companies.
Speaking on the black money issue, Mukherjee said, the government has decided to appoint a group to quantify the black money.
"As soon as the report is available, I will share with you," he added.
To deal with the black money menace, India has completed Double Taxation Avoidance Agreement (DTAA) renegotiations with 23 countries, including Switzerland.
"Out of 65 countries, we have been able to complete the DTAA with 23 countries, including Switzerland," he said.
However, he said, information from Switzerland can be exchanged after completion of ratification process.
"...the agreement which I have signed with my counterpart in the Swiss government in August, they are still taking time for ratification and when it will be ratified from April 1 this year we will get the information," Mukherjee said.
He said, dealing with black money is a serious issue and India will have to proceed according to the laws.
"The point is how to deal with the black money, this is a serious issue. We live in a society which is governed by rule of law and we shall have to proceed as per the laws," Mukherjee said.