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Black Money: India ups ante against tax evaders

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By NewsGram Staff Writer

New Delhi: Out of the promises that brought Indian Minister Narendra Modi to fore a year ago, a major one from the dreamy list was to bring back billions of dollars of black money that the country’s super-rich had stashed abroad. In a bid to live up to the same, his government has introduced a string of tough new measures in recent months to crack the whip on black money.

Photo credit: ecointersect.com
Photo credit: ecointersect.com

The anxiety has deepened in recent weeks as a government-imposed tax payment deadline for those who have stashed their cash in foreign accounts approaches on September 30.

The Associated Chambers of Commerce and Industry of India recently issued a statement denouncing the new law for creating “fear and panic” among industry leaders and trading professionals.

“People are uneasy and worried. The penalty and term of imprisonment are disproportionately high,” said Nishith Desai, a corporate lawyer in Mumbai. Industry experts say the rich are frantically searching for new tax havens and other ways to evade the law. No one knows for sure how much black money is hidden in India and overseas.

However, estimates range from $400 billion to over $1 trillion.

India’s history as a socialist-leaning country unfriendly to business with endemic corruption meant that the country’s rich routinely hid their wealth by hoarding cash and jewellery.

India’s ‘shadow economy’ accounts for over 20 per cent of its economic output. Only 3 per cent of the country pays income taxes. This was revealed by a World Bank estimate in 2010.

Two years ago, the investigative portal Cobrapost conducted a sting on 28 top state-owned and private banks across India in which executives were filmed on hidden camera offering to channel vast sums of customers’ unaccounted cash into the formal banking system. Real estate is another common hiding place for untaxed money.

“Land is where Indian politicians and businessmen park the maximum amount of black money. About 30 per cent of all land transactions across India are managed in cash,” said Pankaj Kapoor, founder of the real estate research firm Liases Foras in Mumbai.

According to the election watchdog Association for Democratic Reforms, 80 per cent of the income of five national political parties comes from unknown sources.

black-money-may-25-sll

“In the disclosures of our elected politicians, you can see the assets have grown but their income and income tax payment have not grown proportionately. How do you explain that?” asked Ramesh Padmanabhan, a senior chartered accountant in Bangalore.

“The process of formalising the informal economy is underway in India,” said Rajeev Chandrasekhar, an independent MP (Karnataka and Bangalore Urban constituency). “A lot of people who are used to an old model of doing business in India are uncomfortable today about the new scrutiny.”

During his election campaign, Modi made the claim that so much money was stashed overseas that if he repatriated it he could deposit Rs 15 lakh into the account of every poor person.

“The big fish must not get away,” Indian Finance Minister Arun Jaitley said when the black money law passed in May.

But interviews with chartered accountants, tax officials and businessmen reveal that in recent months many of India’s wealthy have found new ways around the scrutiny.

A favourite tactic, accountants said, is sending family members abroad for 182 days, after which time they become “non-residents” with foreign accounts and businesses where the family members can stash money.

So far, only one wealthy person has reported black money holdings and paid the tax and penalty.

SC questions Centre on black money

For representational use only
For representational use only

After a seemingly long slumber, the Supreme Court on September 4 put the spotlight back on black money by questioning the Centre to detail the action taken on the special investigation team’s (SIT) recommendations, advocating stringent measures against irregularities in capitation fees, cricket, stock markets and trade-based money laundering.

A bench of Chief Justice HL Dattu and Justices Madan B Lokur and AK Sikri asked attorney general Mukul Rohatgi, “What is the fate of these recommendations by the Supreme Court-appointed SIT? The Centre will tell us about it in the next hearing on October 28.”

The story draws its source from IANS & TOI.

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Demonetisation Anniversary: BJP acts cheeky, releases new video showing Frustration of ‘Corrupt’ Politicians following Demonetisation

The one-minute video, which is now going viral on social media, has already been re-tweeted more than 2 thousand times since it was released on November 7, on the eve of demonetization move.

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Demonetisation Anniversary
Screen grab of the sarcastic video released by BJP to mark Demonetisation Anniversary. Twitter

New Delhi, November 8, 2017 : On November 8 2016, every Indian citizen sat glued to their TV screens as Narendra Modi was set to make a big announcement. Outcome? The Indian Prime Minster shocked the entire nation with the introduction of Demonetisation, a move that was to change the very foundation of the cash-dependent Indian economy.

The much-debated move by Modi garnered the attention of several well-versed economists from the country and abroad, alike. While some people willingly welcomed the move, there were others who stood in staunch criticism.

As the move completes its first year, the Bharatiya Janata Party (BJP) is set to observe November 8 as ‘anti-black money day’ to celebrate Demonetisation anniversary in the country.

On the eve of the Demonetisation anniversary, the BJP released a cheeky video claiming to depict how ‘corrupt’ politicians have been criticizing the move, as the nation won following demonetisation.

WATCH BJP’S TONGUE-IN-CHEEK VIDEO

In the video, the BJP attempted to take a dig at corrupt politicians, who have been criticizing PM Modi’s Demonetisation move.

In the video, a woman, playing the character of a frustrated, corrupt politician can be seen going on a rant over PM Modi’s note ban initiative, which was aimed to combat black money, corruption, fake currency and terrorism.

The video ends with a voice-over saying demonetisation has not only brought out this frustration of corrupt citizens, but also black-money, claiming that almost 99 per cent cash which was previously lying hidden with people has now entered the banking system.

The one-minute video, which is now going viral on social media, has already been re-tweeted more than 2 thousand times since it was released on November 7, on the eve of demonetization move.

Ahead of the Demonetisation anniversary, the last few days have witnessed several leaders present their opinions on PM Modi’s demonetization move.

Finance Minister Arun Jaitley called PM Modi’s note ban initiative a ‘watershed moment’ while Piyush Goyal, Minister of Railways believes the move has pushed India towards a more transparent economy.

However, the move is being criticized by ex-Prime Minister Manmohan Singh calling it ‘irresponsible’. The opposition maintains that PM Modi’s note ban initiative has caused reckless damage to the country and the Indian economy.

On Demonetisation anniversary, the BJP is set to observe November 8 as ‘anti-black money day’, while opposition leaders are set to observe the day as ‘black day’ in protest against the note ban initiative.

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Supreme Court to hear Pleas challenging Article 35A after Diwali, which talks about Special Rights and privileges of Permanent Residents of Jammu and Kashmir

Article 35A talks about special rights and privileges given to only permanent residents of Jammu and Kashmir

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The Supreme Court of India
The Supreme Court of India. Wikimedia
  • The plea said that the special status which people of Jammu and Kashmir enjoys should be canceled
  • In 1954 by a Presidential Order, Article 35A was added to the Indian Constitution
  • The Plea has also challenged a particular provision of the Constitution which denies the right over the property to a woman who marries someone who is from outside the state 

New Delhi (India), August 25, 2017: After Diwali, the Supreme Court of India will hear pleas which challenge the Article 35A, the article talks about special rights and privileges given to people who are permanent residents of Jammu and Kashmir.

Supposedly, the date decided for the hearing of pleas was August 29 but both the Centre and state government of Jammu and Kashmir wanted 4 weeks’ time in order to file their replies respectively, due to this reason the hearing has been postponed to a later date.

The plea said that the special status which people of Jammu and Kashmir enjoys should be canceled.

The Supreme Court was earlier in favor of hearing the case by a constitution bench consisting of 5 judges if the Article 35A is ultra vires (beyond one’s legal power or authority) of the Indian Constitution or if there is any sort of procedural lapse (defective execution of work).

Also Read: Landmark Judgement: Right to Privacy Becomes Fundamental Right of India, Rules Supreme Court

The meaning of Article 35A as per Constitution is that the article gives the right to the state legislature of Jammu and Kashmir to call them permanent residents of that state and also give those (permanent residents) some special rights and privileges whereas by article 370 a special status is given to the state- Jammu and Kashmir.

In 1954 by a Presidential Order, Article 35A was added to the Indian Constitution. According to ANI report, “It also empowers the state’s legislature to frame any law without attracting a challenge on grounds of violating the Right to Equality of people from other states or any other right under the Indian Constitution.” This is the kind of power that this Article holds.

This Article was dragged into controversy after a 2nd plea, was filed by a lawyer and former member of the National Commission for Women Charu Wali Khanna. In her plea, she challenged Article 35A of the Indian Constitution and also Section 6 (talks of permanent residents of the state) of the Jammu and Kashmir Constitution.

Also Read: Long pending injustice to Muslim Women! Supreme Court Hearing in India to Decide Validity of Muslim Divorce Practice “Triple Talaq”

The Plea has also challenged a particular provision of the Constitution which denies the right over the property to a woman who marries someone who is from outside the state. This provision which leads the woman to lose rights over property is also applied to her son.


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Supreme Court seeks Time Frame for bringing a bill, which will Allow NRI Voting from the Overseas

The bench of Chief Justice Jagdish Singh Khehar and Justice D.Y.Chandrachud sought to know the time frame after Attorney General K.K.Venugopal told court that a Team of Ministers (ToM) have recommended such an amendment

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Supreme Court
Supreme Court of India. Wikimedia
  • The Supreme Court sought to know from the time it would require for bringing a bill allowing NRIs vote from their overseas locations
  • The bench sought to know why the government was taking a cumbersome route of amending the electoral act
  • In the last hearing on the matter, former Attorney General Mukul Rohatgi had contended that the modalities of NRI voting can be done by amending the Rules and would not require amending the law

New Delhi, July 21, 2017: The Supreme Court on Friday sought to know from the Central government the time it would require for bringing a bill amending the Representation of People Act to allowing NRIs vote from their overseas locations.

The bench of Chief Justice Jagdish Singh Khehar and Justice D.Y.Chandrachud sought to know the time frame after Attorney General K.K.Venugopal told the court that a Team of Ministers (ToM) have recommended such an amendment.

The Team of Ministers in their meeting on July 20, 2017, have decided that to “facilitate external modes of voting to the overseas electors, an amendment to the Representation of People Act, 1951 would be required by way of introduction of a Bill in Parliament”, the bench was told.

At this, the bench sought to know why the government was taking a cumbersome route of amending the electoral act when same could be achieved by amending the rules.

ALSO READ: Give Due Respect to the Dignity of the Dead: Supreme Court asks State Governments to Follow NHRC Guidelines

The top court, in the last hearing of the matter, had asked the Central government to take a call whether it wanted to amend the Act or the Rules to decide on the modalities of the NRI voting from abroad.

In the last hearing of the matter, former Attorney General Mukul Rohatgi, appearing for one of the petitioners, had contended that the modalities of NRI voting can be done by amending the Rules and would not require amending the law.

Appearing for the Election Commission, senior counsel Meenakshi Arora told the bench that by amending the rules, that they can put in place modalities of voting by the overseas electors, but it was necessary to amend the law to create an exception for overseas voters. (IANS)


NewsGram is a Chicago-based non-profit media organization. We depend upon support from our readers to maintain our objective reporting. Show your support by Donating to NewsGram. Donations to NewsGram are tax-exempt.