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BLACK MONEY

In India, Black money refers to funds earned on the black market, on which income and other
taxes have not been paid. The total amount of black money deposited in foreign banks by Indians
is unknown. Some reports claim a total exceeding US$16.4 trillion are stashed in
Switzerland's. Other reports, including those reported by Swiss Bankers Association and the
Government of Switzerland, claim that these reports are false and fabricated, and the total
amount held in all Swiss banks by citizens of India is about US$2 billion.
In February 2012, the director of the Central Bureau of Investigation said that Indians have $500
billion of illegal funds in foreign tax havens, more than any other country. In March 2012, the
Government of India clarified in its parliament that the CBI Director's statement on $500
billion of illegal money was an estimate based on a statement made to India's Supreme Court in
July 2011.

Map of tax havens, using the 2007 proposed "Stop Tax Haven Abuse Act", US Congress, list of
tax havens

SOURCE OF BLACK MONEY

Indian corporates invariably under invoice their exports and over invoice their imports from tax
heaven countries such as Singapore, UAE, Hong Kong, etc. Thus the promoters of the public
limited companies who hold rarely more than 10% of share capital, earn black money abroad at
the cost of majority share holders and tax income to the Indian government.
Politicians, political parties and corrupt higher officials of government and its institutions take
bribes from foreign companies and park/invest the money abroad in tax havens for transferring to
India when needed. Many times locally earned bribes/funds/collections are also routed abroad
through hawala channels for evading from Indian tax authorities and consequent legal
implications.
The Vodaphone tax case is a glaring example where foreign multinational companies also evade
tax payments in India by making transactions with shell companies registered in tax haven
countries
Round-tripping of black money

The unlawfully acquired money kept abroad is routed back to India by round tripping processes.
Round tripping involves getting the money out of one country, say India, sending it to a place

895 billions).80 per cent. India is the only major country where infrastructure and human resources development is yet to take place at par with advanced countries. Also fictitious high value round trip transactions via tax heaven countries by diamonds and precious stones exporters and importers is a channel for to and fro transactions outside the country. sending it back home to earn taxfavoured profits. Foreign Direct Investment (FDI) is one of the legal channel to invest in Indian stock and financial markets. dressed up to look like foreign capital. So. who have invested in their own companies.227 billions) and Singapore (9. Foreign funds received by charitable organisations. through specifically designed contracts. As per data released by the Department of Industrial Policy and Promotion (DIPP).17 per cent. The investor in PNs does not hold the Indian securities in her/his own name. US$54. Not only Indians with black . non-government organisations (NGOs) and other associations need not disclose the Indian beneficiary. many of whom could actually be Indian residents. fictitious software exports can be booked by software companies to bring black money in to India as tax exemptions are permitted to software companies. as also dividends and capital gains. the interest rates offered abroad in US$ currency is negligible and there is no capital appreciation if the money is parked abroad by the Indians. Gold imports through official channel and smuggling is a major conduit to bring back the black money from abroad and convert in to local black money as the gold commands insatiable demand among the rural investors particularly.like Mauritius and then. These are legally held by the FIIs. Indians are routing their foreign funds back to India as the capital appreciation in Indian capital markets is far more attractive. but s/he derives economic benefits from fluctuation in prices of the Indian securities. US$11. Mauritius and Singapore with their small economies cannot be the sources of such huge investments and it is apparent that the investments are routed through these jurisdictions for avoidance of taxes and/or for concealing the identities from the revenue authorities of the ultimate investors. Investment in the Indian Stock Market through Participatory Notes (PNs) or Overseas Derivative Instruments (ODIs) is another way in which the black money generated by Indians is re-invested in India. two topmost sources of the cumulative inflows from April 2000 to March 2011 are Mauritius (41. Also. Unlike in earlier decades.

However. This revision. These allegations were later denied by Swiss Bankers Association as well as the central bank of Switzerland that tracks total deposits held in Switzerland by Swiss and non-Swiss citizens." In August 2010. the Finance Ministry has refused to reveal the names. for . the government revised the Double Taxation Avoidance Agreement to provide means for investigations of black money in Swiss banks. will allow the government to make inquiries of Swiss banks in cases where they have specific information about possible black money being stored in Switzerland. and circulated as gospel truth. In 2011. The Swiss Bankers Association never said or published such a report. expected to become active by January 2012. As of December. Indian lawmakers and administrators can curtail the various misused incentives/relaxations devised for foreign investors as international capital is bound to reach India irrespective of foolproof laws. several reports Indian media alleged Swiss Bankers Association officials to have said that the largest depositors of illegal foreign money in Switzerland are Indian. Black money in Swiss banks In early 2011. James Nason of Swiss Bankers Association in an interview about alleged black money from India. this story was a complete fabrication. 2011. and by wealth managers as fudiciaries of non-Swiss citizens. Skilled human resources are in shortage and not capital resources any more. suggests "The (black money) figures were rapidly picked up in the Indian media and in Indian opposition circles.money parked abroad but also foreign investor are eager to invest in India as there are not much scope for capital investment in developed countries. the Indian government received the names of 782 Indians who had accounts with HSBC. Anyone claiming to have such figures (for India) should be forced to identify their source and explain the methodology used to produce them.

privacy reasons. Largest depositors in Swiss Banks are also reported to be Indians". The Swiss Ministry of External Affairs has confirmed these figures upon request for information by the Indian Ministry of External Affairs.4 trillion in some media reports. though they did confirm that no current Members of Parliament are on the list. Swiss National Bank estimates that the total amount of deposits in all Swiss banks.13 per cent of the total bank deposits of citizens of all countries. Domestic Black Money . if the King is immoral so would be his subjects" The CBI Director later clarified in India's parliament that the $500 billion of illegal money was an estimate based on a statement made to India's Supreme Court in July 2011.29 per cent in 2006 to 0. the Government of India claimed in May 2012 that the deposits of Indians in Swiss banks constitute only 0. In response to demands from the Bharatiya Janata Party (BJP) opposition party for the release of the information. published in May 2012. This amount is about 700 fold less than the alleged $1. while it would not publish the names. Central Bureau of Investigation (CBI) director A P Singh speaking at the inauguration of first Interpol global programme on anti-corruption and asset recovery said: "It is estimated that around 500 billion dollars of illegal money belonging to Indians is deposited in tax havens abroad. the government announced on 15 December that. which says . by citizens of India were CHF 1. In a hint at scams involving ministers. US$2. Further. After formal inquiries and tallying data provided by banking officials outside India. According to White Paper on Black Money in India report.1 billion). In other words. In February 2012. Singh said: "I am prompted to recall a famous verse from ancient Indian scriptures. The through the Investigation Division of the Central Board of Direct Taxes released a White Paper on Black Money giving the Income Tax Department increased powers.95 billion.95 billion (INR 92. it would publish a white paper about the HSBC information. the share of Indians in the total bank deposits of citizens of all countries in Swiss banks has reduced from 0.13 per cent in 2010. at the end of 2010.

The list which had names of dictators and international criminals. 2015 HSBC leaks In February 2015. The list was obtained by French newspaper Le Monde and included the names of several prominent businessmen. diamond traders and politicians. The number of Indian HSBC clients is roughly double the 628 names that French authorities gave to the Indian Government in 2011. BBC. Haaretz. HSBC had helped its clients evade taxes and said in a statement that "standards of due diligence were significantly lower than today.7 billion). Indian Express released the list of 1195 Indians account holders and their balances for the year 2006-07 in HSBC's Geneva branch. UK. London. Israel. India has no centralized repository— like the registrar of companies for corporates—of information on public trusts.Indian companies are reportedly misusing public trusts for money laundering. Indian government said it will probe this matter. was simultaneously published by news organisations in 45 countries including The Guardian." SIT on black money . The balance against the 1195 names stood at 25420 crore (US$3.

it may very well reveal the degree of "softness of the State. The bench (consisting of Justice Altamas Kabir in place of Justice B Sudershan Reddy. and other legal entities. Depending on the volume of such monies. and also of tax collection. This body would report to the SC directly and no other agency will be involved in this. in terms of both crime prevention. The SC on 4 July 2011. is of primordial importance to the welfare of the citizens. and the number of incidents through which such monies are generated and secreted away. Supreme Court of India. ordered the appointment of a Special Investigating Team (SIT) headed by former SC judge BP Jeevan Reddy to act as a watch dog and monitor investigations dealing with the black money. The court argued that the government should be more forthcoming in releasing all available information on what it called a "mind-boggling" amount of money that is believed to be held illegally in foreign banks." — Justice B Sudershan Reddy and Justice S S Nijjar. 176 of 2009 in the Supreme Court of India seeking the court's directions to help bring back black money stashed in tax havens abroad and initiate efforts to strengthen the governance framework to prevent further creation ofblack money. the (SC) asked why the names of those who have stashed money in the Liechtenstein Bank have not been disclosed. Source: The government subsequently challenged this order through Interlocutory Application No. In January 2011.Noted jurist and former law minister Ram Jethmalani along with many other well known citizens filed a Writ Petition (Civil) No. The two judge bench observed that the failure of the government to control the phenomenon of black money is an indication of weakness and softness of the government. The issue of unaccounted monies held by nationals. in foreign banks. The quantum of such monies may be rough indicators of the weakness of the State. . 8 of 2011.

to Justice (retd) M B Shah. On 27 October 2014. Justice Kabir said that the plea is maintainable while Justice Nijjar said it is not. as revealed to India by German authorities. Indian Government submitted name of three people in an affidavit to the Supreme Court who have black money account in foreign countries.Prashant Bhushan and Yogendra Yadav furnished a letter written by Falciani on 21 August 2015. On 12 May 2015.since Justice Reddy retired) on 23 September 2011 pronounced a split verdict on whether government plea is maintainable. Double taxation agreements Indian Government has repeatedly argued before the Court that it cannot divulge the names. Government of India submitted the names of 627 people in the Supreme Court of India in a sealed envelope on 29 October 2014. But on the very next day. Ram Jethmalani attacked Modi Government for failing to bring back the Black money as was promised before Election. The honorable bench of the Supreme court also asked the Centre not to indulge in any kind of probe rather just pass the names to them and Supreme court will pass the order for further probe. Indian Government disclosed to the Supreme Court the names of 26 people who had accounts in banks in Liechtenstein. who is heading the SIT on black money. In April 2014. Following the order. Supreme Court of India orders centre Government to reveal all the names of black money account holders which they had received from various countries like Germany. It has further argued that the privacy of individuals would be violated by the revelation of data. the matter will be referred to a third judge. . Due to this split verdict. On 2nd Nov 2015. These arguments are only designed to stall the revelation of names of some favoured entities. HSBC whistleblower Herve Falciani said he is willing to "cooperate" with the Indian investigative agencies in black money probe but would need "protection".

Further." he added. On 2nd Nov 2015. A bank has been revealed to have acted like a hawala operator. DTAA is about white incomes and not black incomes. In brief. who works with a team of lawyers and experts. Why has the government not initiated action against them and hawala operators? Why is the government not proactive in analysing relevant data from the International Consortium of Investigative Journalists (ICIJ) and Julian Assange? No wonder the perception is that the government is stalling on unearthing Indian black money. no data has been supplied to India by any of the countries with which this treaty has been signed.BJP leader Dr. It is no wonder then that till date. this data would not be available to either of the two countries to be exchanged. They can contact us. DTAA is about declared (white) incomes of entities so that tax may be levied in one or the other country and not in both. Black income is not revealed in either of the two countries so there is no question of double taxation. Other MNC and private Indian banks also indulge in these activities. "It's just up to (the Indian administration). He said India was given only 2 MB of the 200 GB of data." he said. "If India asks tomorrow we will send a proposal tomorrow. The HSBC Black money whistleblower Herve Falciani. Herve Falciani told in a press conference organised by Prashant Bhushan and Yogendra . Criticism of Government Different governments have tried to stall SIT. so it is disingenuous to say that in future no data would be given to us if names are given to courts.Subramanian Swamy said that DTA was not a valid reason for not revealing names of the accounts of Indians held in foreign banks. told NDTV that there is "1000 times more information" available for investigators and there are a lot of business procedures to be unveiled to them.

Hasan Ali case Hasan Ali Khan was arrested by Enforcement Directorate and the Income Tax Department on charges of stashing over 360 billion in foreign banks. "Hasan Ali Khan stands accused of massive tax evasion and stashing money in secret bank accounts abroad. India Today. According several news reports. Upon formal request by Indian and Swiss government authorities. the probe against him has proceeded at an extremely slow pace and seems to have hit a dead end. media sources claimed this case is becoming yet another perfect instance of how investigative agencies like Income Tax Department go soft on high-profile offenders. India Today claimed that it had verified a letter confirming the US$8 billion in black money was in a Swiss bank UBS account. ED lawyers said Khan had financed international arms dealer Adnan Khashoggi on several occasions. Ali's premises were raided by ED as far back as 2007. The Swiss bank UBS has denied Indian media reports alleging that it maintained a business relationship with or had any assets or accounts for Hasan Ali Khan accused in the US$8 billion black money case. the bank announced that the documentation supposedly corroborating such allegations were forged. wrote. and the government of India too has verified this with UBS. and numerous media reports claiming US$8 billion in stashed black money were false.500 crore from some of the account holders and expected to recover a total of 10000 crore till March 2015 . India has not used information on those illegally stashing away black money in foreign bank accounts. But the problem is that the law enforcement agencies .Yadav that. Under the supervision of the SIT the I-T department has recovered around Rs 3. and still millions of crores were flowing out. However. in a later article.

and to a Latin America-wide average of 41 to 44% of respective gross domestic products.7%." Estimates of Indian black money As Schneider estimates. that the size of India's black money economy is between 23 to 26%. . with India below average. UBS Zurich has already denied having any dealings with Khan. Public protests and government's response Further information: 2011 Indian anti-corruption movement and Corruption in India In May 2012. For one. to an Africa-wide average to 41 to 44%. compared to an Asia-wide average of 28 to 30%. the average size of the shadow economy (as a percent of "official" GDP) in 96 developing countries is 38.have precious little evidence to back their claims. the Government of India published a white paper on black money. It disclosed India's effort at addressing black money and guidelines to prevent black money in the future. According to this study. using the dynamic multiple-indicators multiple-causes method and by currency demand method.

India has following institutions already preventing. Meghalaya and ends at the city of Mahakal Ujjain. Jammu and Kashmir. Haryana. spiritual groups and organizations of the nation. On 30 January 2011. Assam. Swami Ramdev. West Bengal. More than 1 lakh people of Jhansi city had taken pledge to fight against corruption. Orrisa. . On 20 September Swami Ramdev had started second phase of his yatra from the fort of Jhansi. popular as Baba Ramdev is a Hindu swami and a yoga guru. Delhi which was attended by lakhs of people after which a written representation was handed over to the President to bring back black money.  Directorate General of Income Tax Investigation  Directorate of Income Tax Intelligence and Criminal Investigation. Soon after on 27th Feb. a written representation of people from over 600 districts was sent to the Prime Minister which contained demand of bringing back black money stashed abroad & putting an end to corruption. Himachal Pradesh. finding and investigating underground economy and black money. Uttar Pradesh. Maharashtra. Ramdev himself sent the signed representation to the President of India through the District Magistrate of Bilaspur. He is a social activist and has staged protests against corruption in the country. on the day which marks the birth anniversary of freedom fighter Shaheed Chandrasekhar Azad. Dwarika Gujarat on 2 September 2010. He has been associated with the 2011 Indian anti-corruption movement and also started his Bharat Swabhiman first phase Yatra with the pledge of disease free India and simultaneously to eradicate corruption and bring back black money from the birthplace of Sri Krishna. organized a huge rally in Ramlila Maidan. which was supported by all major social.exercises control over the Investigation Division of the Central Board of Direct Taxes.The Member controls the:  Chief Commissioner of Income Tax Central.The Member is a high ranking IRS officer of the rank of Special Secretary to the Government of India. Chhattisgarh. 2011 he. Jharkhand. Central Board of Direct Taxes: is a statutory authority functioning across India under the Central Board of Revenue Act of 1963. This yatra has been through 25 states of India like Rajasthan. The Member(Investigation) of the CBDT.

with focus on major financial centres in India. especially in new areas of tax evasion through its intelligence network across the country and disseminates information across Indian government organisations by issuing Modus Operandi Circulars and Alert Circulars to apprise field formations of the latest trends in tax evasion. It administers the provisions of the Foreign Exchange Regulation Act of 1973 (FERA). It routinely arranges for enforcement operations to research into the evasion of duty and taxes. analysing. It maintains close liaison with the World Customs Organisation. has 39 offices and 2000 employees. This organisation has been in operation for nearly 50 years. This India-wide directorate. confiscation of the proceeds of such crime. This government organisation for receiving. Central Board of Excise and Customs and Directorate of Revenue Intelligence: is the apex intelligence organisation responsible for detecting cases of evasion of central excise and service tax. Brussels. has offices in more than 800 buildings spread over 510 cities and towns across India and has over 55. Enforcement Directorate: was established in 1956. matters related to foreign exchange market and international hawala transactions. enforcement and financial investigative agencies of state and central government of India.000 employees and even employees who are deputed from premier police organisations to aid the department. The organisation has thousands of employees and is divided into seven zones all over India. interpretation and dissemination on matters relating to violations of taxation and customs law. It is entrusted with the investigation and prosecution of money-laundering offences.000 suspect financial transaction trails to help identify and stop black money and money laundering. is primarily responsible for combating the menace of black money. It shares this information with other ministries. The Directorate of Revenue Intelligence functions under the CBEC. Financial Intelligence Unit: has been operating as a separate investigative entity since 2004. and disseminating information relating to suspect financial transactions. it routinely examines about 700. collation. It is entrusted with the responsibility of collection of data and information and its analysis.The Director General of Income Tax (International Taxation) is in charge of taxation issues arising from cross-border transactions and transfer pricing. processing. Every month. The Directorate develops intelligence. . later updated to Foreign Exchange Management Act of 1999 (FEMA).000 investigative reports and over 1.

the Indian central government coordinates its efforts with state governments with dedicated departments to monitor and stop corporate frauds.such as National Investigation Agency and National Crimes Record Bureau . and foreign customs administrations. sales tax frauds and income tax-related frauds. investigate and prosecute black money cases. generation and parking of black money and illegal transfers. The COIN offices gather evidence through diplomatic channels from the foreign custom offices and other foreign establishments to establish cases of mis-declaration to help identify and stop tax evasion and money laundering. This organisation maintains constant interaction with its Customs Overseas Investigation Network (COIN) offices to share intelligence and information on suspected international financial transactions. intelligence sharing. In addition to direct efforts. and investigations at national as well as regional levels amongst various law enforcement agencies to prevent financial crimes. India has 10 additional separate departments operating under the central government of India . Central Economic Intelligence Bureau: functions under India's Ministry of Finance. bank frauds. In addition to the primary agencies listed above.the Regional Intelligence Liaison Office at Tokyo. It is responsible for coordination. the government appointed a high-level committee headed by MC Joshi (the then CBDT Chairman) in June 2011 to study the . frauds by non-banking financial companies. INTERPOL. Discovery and enforcement is also assisted by India's Central Bureau of Investigation and state police. MC Joshi committee on black money After a series of ongoing demonstrations and protests across India.to help locate.

5. BJP) claim to have incomes of merely ₹5 billion (US$74 million) and ₹2 billion(US$29 million). Monaco. Liberia.generation and curbing of black money. 5 and 7 years to 2. . Tax Information Exchange Agreements To curb black money. 4. 7 and 10 years rigorous imprisonment and also changes in the years of punishment in the Income Tax Act. Macau. the Isle of Man. 2.5 billion) and ₹150 billion (US$2. Just as the USA Patriot Act under which global financial transactions above a threshold limit (by or with Americans) get reported to law enforcement agencies. set up all-India judicial service and a National Tax Tribunal. Its key observation and recommendations were: 1. The two major national parties (an apparent reference to Indian National Congress. Bahamas. India has signed TIEA with 13 countries -Gibraltar. 3. Bermuda. the British Virgin Islands. These parties spend between ₹100 billion (US$1. Change maximum punishment under Prevention of Corruption Act from the present 3. Based on domain knowledge. The committee finalised its draft report on 30 January 2012. Taxation is a highly specialised subject. Jersey. the Cayman Islands. India should insist on entities operating in India to report all global financial transactions above a threshold limit. But this isn't "even a fraction" of their expenses. Consider introducing an amnesty scheme with reduced penalties and immunity from prosecution to the people who bring back black money from abroad.2 billion) annually on election expenses alone.

where money is believed to have been stashed away.Argentina. in 1936 Ayers Committee investigated black money from the Indian colony. It suggested major amendments to protect and encourage the honest taxpayer and effectively deal with fraudulent evasion. Proposals to prevent Indian black money History Even in colonial India. the Finance Minister Arun Jaitely on behalf of the Indian government requested the Swiss Government to hand over all the bank details and names of Indians having unaccounted money in Swiss banks. In June 2014. Current Proposals . India and Switzerland. have agreed to allow India to routinely obtain banking information about Indians in Switzerland from 1 April 2011. For example. numerous committees and efforts were initiated to identify and stop underground economy and black money with the goal of increasing the tax collection by the British Crown government. claims a report. Guernsey and Bahrain .

India has made the following proposals to tackle its underground economy and black money. Opaque and complicated regulations are other major disincentive that hinders compliance and pushes people towards underground economy and creation of black money. Lower taxes and simpler compliance process reduces black money.In its white paper on black money. Reducing disincentives against voluntary compliance Excessive tax rates increase black money and tax evasion. When tax rates approach 100 per cent. the report finds is the high transaction costs associated with compliance with the law. The report finds that punitive taxes create an economic environment where economic agents are not left with any incentive to produce. because higher is the incentive for tax evasion and greater the propensity to generate black money. as well as excessive resources to comply. Banking transaction tax . Another cause of black money. tax revenues approach zero. suggests the white paper. Compliance burden includes excessive need for compliance time.

When one can not obtain a licence to undertake a legitimate activity. The successive waves of economic liberalisation in India since the 1990s have encouraged compliance and taxes collected by the government of India have dramatically increased over this . improve employment generation and also lower corruption. ease inflation. Economic liberalization The report suggests that non-tariff barriers to economic activity such as permits and licences.Baba Ramdev also known as Yoga guru outlined his policy prescription that involves replacement of most direct and indirect levies with a banking transaction tax and de-monetisation of currency notes of Rs 500 and Rs 1.000 to help prevent Indian black money. the transaction costs approach infinity. and create insurmountable incentives for unreported and unaccounted activities that will inevitably generate black money. long delays in getting approvals from government agencies are an incentive to proceed with underground economy and hide black money.

while Property Title Certification system dramatically simplified. commonly in the form of stamp duty. the report offers gold trading. and contingent costs related to title disputes and litigation. The real estate sector in India constitutes about 11 per cent of its GDP. suggests the report. People of India find it easier to deal with real estate transactions and opaque paperwork by paying bribes and through cash payments and under-declaration of value. the report suggests can yield a significant dividend in the form of reducing generation of black money in the long term. The process of economic liberalisation must be relentlessly continued to further remove underground economy and black money. Reforms in vulnerable sectors of the economy Certain vulnerable sectors of Indian economy are more prone to underground economy and black money than others. advertising. Unless the real estate transaction process and tax structure is simplified. Old and complicated laws such as the Urban Land Ceiling Regulation Act and Rent Control Act need to be repealed. Similar effective reforms of other vulnerable sectors like real estate. gold smuggling is no longer the menace as it used to be. As example. These sectors need systematic reforms. This is mainly on account of very high levels of property transaction taxes. Investment in property is a common means of parking unaccounted money and a large number of transactions in real estate are not reported or are under-reported. the report suggests this source of black money will be difficult to prevent. registration. Real estate transactions also involve complicated compliance and high transactions costs in terms of search.period. commissions. property value limits and high tax rates eliminated. While gold inflows into India have remained high after reforms. High transaction taxes in property are one of the biggest impediments to the development of an efficient property market. which was one of the major sources of black money generation and even crime prior to the reforms induced in that sector. .

adding data mining capabilities. Creating effective credible deterrence Effective and credible deterrence is necessary in combination with reforms. . In addition.Other sectors of Indian economy needing reform. bullion and non-profit organisations. integration of systems and compliance departments of the Indian government. as identified by the report. claims the report. simple processes. mining permits. Credible deterrence needs to be cost effective. direct tax administration. and improving prosecution processes. elimination of bureaucracy and discretionary regulations. The report suggests Whistleblower laws must be strengthened to encourage reporting and tax recovery. financial auditors of companies have to be made more accountable for distortions and lapses. the report suggests public awareness initiatives must be launched. Public support for reforms and compliance are necessary for long term solution to black money. Supportive measures Along with deterrence. include equity trading market. Such deterrence to black money can be achieved by information technology (integration of databases). transparency.

Modified Currency Notes . including all popular tax haven countries. India has expanded agreements with 30 countries which requires mutual effort to collect taxes on behalf of each other. These voluntary schemes have been criticized on the grounds that they provide a premium on dishonesty and are unfair to honest taxpayers. nor one that is routine. International enforcement India has Double Tax Avoidance Agreements with 82 nations. The report suggests that the Agreements be expanded to other countries as well to help with enforcement. The report suggests that such amnesty programmes can not be an effective and lasting solution. if a citizen attempts to hide black money in the other country. Of these.Amnesty Amnesty programmes have been proposed to encourage voluntary disclosure by tax evaders. as well as for their failure to achieve the objective of unearthing undisclosed money.

₹1000 (US$15) and ₹500 (US$7. .Government printing of such legal currency notes of highest denomination i. Following this grace period the currency notes will cease to be accepted as legal tender or destroyed under the instructions of The Reserve Bank of India.e..40) which remain in the market for only 2 years. As a consequence turning most of the unaccountable money into accountable and taxable money. After a 2-year period is expired there should be a one-year grace period during which these currency notes should be submitted and accepted only in bank accounts.