A Central Board of Direct Taxes (CBDT) panel on black money has suggested enactment of new laws, strengthening of existing legislation and introduction of deterrent penalties for tax offences to deal with the menace.

In its 66-page report on measures to tackle black money in India and abroad, the CBDT committee also recommended steps to prevent generation of illicit funds through transactions in property, bullion and equity market.

Besides, the panel, headed by former CBDT Chairman Laxman Das, made a case for strengthening laws relating to investments by FIIs, Participatory Notes (PNs) and routing of funds from Mauritius.

The Committee, however, did not provide any estimate of the black money, saying it can be said that though black money exists to a substantial extent in our economy, its quantum cannot be determined exactly.

It did provide estimates of various studies and said think-tanks like NIPFP, NIFM and NCAER which are looking into the matter would submit their reports by September to the government.

The Committee, which was set up by the government in wake of public outcry over corruption and bringing back of funds stashed abroad, said while there was no dearth of laws to deal with the menace of black money, some new laws were needed to deal with specific issues.

Some new laws, such as to regulate the cash economy, and some changes to the existing legal provisions also need consideration, it said.

Rejecting the demand of some social activists that black money held abroad be declared national asset, the panel said, No purpose will be served by declaring wealth generated illegally as national asset.

The CBDT panel said the laws which could be amended to further strengthen its provision to tackle black money include the Coinage Act 2011, RBI Act 1934, FEMA, IPC and CrPC.

The committee has pitched for strengthening of manpower and resources in both the CBDT and CBEC. It said shortage of manpower has been seriously hampering the functioning of the tax collecting arms of the revenue department.

The report has been made public on the day Yoga Guru Ramdev winded up his agitation on black money.

The report further said there are multiple administrative agencies to deal with the problem of black money. There is, thus, no need to create any further agencies.

However, the existing agencies need to be strengthened, both in terms of manpower and other resources, the report said, adding there is also a need for better coordination among all agencies.

The report said black money is generated through activities both legal and illegal. To check generation of black money through illegal activities, measures have to be taken to reduce and punish such activities, the report added.

Although tax administrations have a limited role in checking illegal activities, the CBDT panel said the consumption and laundering of black money so generated, as well as generation of black money earned through legal means, can be checked and reduced by an efficient and alert tax administration.

The committee further said there can be no single or omnibus law to deal with the menace.

Noting that persons demitting public office do not declare their assets, the CBDT panel said such a requirement should be mandatory. Politically exposed persons, before they take their pension entitlements, could be subjected to scrutiny with respect to accretions in wealth assets.