Why in the News
The Central Board of Direct Taxes disclosed through an RTI reply that ₹14,601 crore worth of undisclosed offshore investments, revealed in the Panama, Paradise and Pandora Papers investigations, have been “brought to tax” by the Income Tax Department.
Background: Global Offshore Investigations
The investigations were conducted by The Indian Express in collaboration with the International Consortium of Investigative Journalists and global media partners.
1. Panama Papers
- Published in 2016
- ₹13,800 crore brought to tax
2. Paradise Papers
- Published in 2017
- ₹115 crore brought to tax
3. Pandora Papers
- Published in 2021
- ₹686 crore brought to tax
- Total: ₹14,601 crore
What Does “Brought to Tax” Mean?
- In taxation terminology, “brought to tax” means that income, assets, or investments that were previously undisclosed or underreported have been formally assessed by tax authorities and subjected to tax liability under the law.
- It does not automatically mean that the tax has already been collected.
Enforcement Action Taken
- 1,255 tax cases filed in total
- 426 Panama
- 494 Paradise
- 335 Pandora
- Multi Agency Group formed after Pandora Papers revelations
- Financial Intelligence Unit India sent requests to foreign jurisdictions regarding 482 persons
- Seven meetings of the Multi Agency Group held
Legal and Institutional Framework
- Income Tax Act, 1961
- Black Money Undisclosed Foreign Income and Assets Act, 2015
- Information exchange under international tax treaties
- Global cooperation to tackle tax havens
| [2021] Which one of the following effects of the creation of black money in India has been the main cause of worry to the Government of India?
(a) Diversion of resources to the purchase of real estate and investment in luxury housing (b) Investment in unproductive activities and purchase of precious stones, jewelry, gold, etc. (c) Large donations to political parties and the growth of regionalism (d) Loss of revenue to the State Exchequer due to tax evasion |
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