Executive Summary:
This document addresses the transfer of black money to foreign countries and the steps taken by the Indian government to curb such transactions. It outlines measures for monitoring foreign remittances, actions taken against tax evasion, and various legislative and administrative initiatives to tackle black money. Key measures include the Black Money Act 2015, the Fugitive Economic Offenders Act 2018, and international agreements for information exchange.
Key Points / Main Content:
Monitoring and Reporting of Foreign Remittances:
Tax deduction at source is mandated under Section 195 of the Income-tax Act, 1961, along with Rule 37BB, for remittances abroad.
Remittances require self-declaration in Form 15CA and a certificate from a Chartered Accountant in Form 15CB.
Authorized dealers must submit quarterly statements in Form 15CC.
Tax Collected at Source (TCS) on foreign remittances under the Liberalised Remittance Scheme (LRS) has been in effect since October 1, 2020.
Actions Against Tax Evasion:
The Income Tax Department takes action against detected cases of tax-evaded income or black money, including searches, surveys, inquiries, assessments, and prosecution.
Data regarding all such cases and amounts are not maintained centrally.
Government Initiatives to Tackle Black Money:
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, is in effect from July 1, 2015.
A Special Investigation Team (SIT) on Black Money was constituted in May 2014.
The government takes action on credible information regarding black money abroad, including HSBC cases, ICIJ cases, Paradise Papers, and Panama Papers.
The Fugitive Economic Offenders Act, 2018, allows for the attachment and confiscation of proceeds of crime.
International Cooperation and Information Exchange:
India engages with foreign governments for information exchange through tax treaties, including Double Taxation Avoidance Agreements and Tax Information Exchange Agreements.
India participates in the Automatic Exchange of Information (AEOI) based on the Common Reporting Standard and has an Inter-Governmental Agreement (IGA) with the USA for sharing financial account information.
Enforcement and Legislative Measures:
Enforcement actions include investigations, searches, surveys, and prosecutions.
Extensive use of IT and data analytics for identifying high-risk cases.
Legislative provisions in the Income Tax Act, 1961, address black money.
Aadhaar-PAN Linking and Compliance Campaign:
Linking Aadhaar with PAN is mandated to prevent tax frauds.
The NUDGE campaign, launched in November 2024, encourages voluntary compliance for declaring foreign income and assets.
24,678 taxpayers reported their foreign assets and income in revised ITRs for AY 2024-25.
Impact Analysis:
Taxpayers:
Impact: Increased scrutiny and compliance requirements for foreign remittances and asset declarations. Potential penalties and prosecution for non-compliance.
Action Required: Accurately report foreign assets and income in Income Tax Returns, comply with TCS regulations, and provide necessary documentation for remittances.
Banks and Authorized Dealers:
Impact: Increased reporting requirements and responsibilities for monitoring foreign remittances.
Action Required: Implement systems for collecting and reporting data on foreign remittances, ensure compliance with TCS regulations, and submit quarterly statements in Form 15CC.
Income Tax Department:
Impact: Enhanced tools and frameworks for detecting and prosecuting cases of black money and tax evasion.
Action Required: Utilize data analytics and information received through international agreements to identify high-risk cases, conduct investigations, and take enforcement actions.
Chartered Accountants:
Impact: Responsibility for certifying the accuracy of financial information related to foreign remittances.
Action Required: Conduct thorough examinations of relevant agreements and documents before issuing certificates in Form 15CB.
Key Entities Referenced
Incometax Act, 1961: Indian legislation mandating tax deductions at source for foreign remittances.
Incometax Rules, 1962: Indian regulations supplementing the Incometax Act, 1961, particularly Rule 37BB.
Finance Act, 2020: Indian legislation that introduced Tax Collected at Source (TCS) on foreign remittances under the Liberalised Remittance Scheme (LRS).
Liberalised Remittance Scheme: Scheme allowing Indian residents to remit money abroad, subject to certain conditions and regulations.
Black Money Undisclosed Foreign Income and Assets and Imposition of Tax Act, 2015: Indian law enacted to address the issue of black money stashed abroad.
Special Investigation Team on Black Money: Indian team constituted in May 2014, under the Chairmanship and Vice Chairmanship of two former Judges of the Honble Supreme Court to investigate matters related to foreign stashing of unaccounted monies.
Fugitive Economic Offenders Act, 2018: Indian law providing for attachment and confiscation of proceeds of crime and properties of fugitive economic offenders.
United States of America: Country with which India has an Inter-Governmental Agreement (IGA) for automatic exchange of financial account information.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UNSTARRED QUESTION 2345
TO BE ANSWERED ON MONDAY, AUGUST 04, 2025 / SRAVANA 13, 1947 (SAKA)
TRANSFER OF BLACK MONEY TO FOREIGN COUNTRIES
2345. SHRI ANTO ANTONY
Will the Minister of Finance be pleased to state:
(a) whether the Government has noticed that the black money is being transferred through
different banks to different foreign countries to evade income tax;
(b) if so, the details thereof including the amount transferred by different banks during the last
five years, year-wise and bank-wise; and
(c) the steps taken by the Government to stop such transactions?
ANSWER
MINISTER OF STATE FOR FINANCE
(SHRIPANKAJ CHAUDHARY)
(a) and (b) The Income-tax Act, 1961 mandates deduction of tax at source under section 195 read
with Rule 37BB of the Income-tax Rules, 1962, at the time of making remittances abroad. Every such
remittance is required to be accompanied by self-declaration in Form 15CA from the person
responsible for paying to the non-resident and a certificate from a Chartered Accountant in Form
15CB, certifying that he has examined relevant agreement / documents. The authorized dealer is also
required to submit quarterly statement in Form 15CC in respect of remittances made.
Further, to enhance the monitoring of outbound remittances, Tax Collected at Source (TCS) on foreign
remittances under the Liberalised Remittance Scheme (LRS) was introduced by the Finance Act, 2020
and has been in effect since October 1, 2020. These measures improve financial discipline and provide
the Government with greater visibility into the flow of funds abroad through formal banking channels.In cases where the remittance of tax-evaded income or black money is detected, appropriate action is
taken by the Income Tax Department. Such actions include searches, surveys, inquiries, assessments,
levy of taxes, penalties, and prosecution in criminal courts, wherever applicable.
However, data regarding all such cases and the amount of money sent abroad in each case is not
maintained centrally.
(c) The Government has taken several measures to effectively tackle instances of transfer of tax
evaded income to foreign countries through banks. These measures include policy-level initiatives,
effective enforcement actions on the ground, putting in place robust legislative and administrative
frameworks, systems and processes with due focus on capacity building and data integration and
mining through increasing use of information technology. Steps taken by the Government to stop such
transactions are detailed as below:
(i) Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
which has come into force w.e.f. 01.07.2015 has been enacted to specifically and effectively deal with
the issue of black money stashed abroad.
(ii) Special Investigation Team (SIT) on Black Money under the Chairmanship and Vice-
Chairmanship of two former Judges of the Hon’ble Supreme Court was constituted in May 2014, to
coordinate policy and investigation across agencies in matters related to foreign stashing of
unaccounted monies.
(iii) The Government has taken pro-active and effective steps whenever any credible information
has been received with regard to black money abroad, whether in HSBC cases, ICIJ cases, Paradise
Papers or Panama Papers. These steps include constitution of Multi-Agency Group in relevant cases,
calling for definite information from foreign jurisdictions, bringing the black money to tax under
relevant law, launching prosecutions against the offenders etc.
(iv) The Fugitive Economic Offenders Act, 2018 has been enacted to provide for attachment and
confiscation of the proceeds of crime associated with scheduled economic offences and the properties
of the fugitive economic offenders and deter them from evading the process of Indian law by
remaining outside the jurisdiction of Indian Courts.
(v) The Government of India has been proactively engaging with foreign governments, for
exchange of information, and has entered into tax treaties including Double Taxation Avoidance
Agreements, Tax Information Exchange Agreements, the Multilateral Convention on Mutual
Administrative Assistance in Tax Matters and the SAARC Multilateral Agreement, with other
countries which provide for mutual administrative assistance including exchange of information
concerning taxes.(vi) India has also joined the Automatic Exchange of Information (AEOI) based on the Common
Reporting Standard and receives financial account information of Indian residents in other countries
with which the AEOI relationship is activated. India has also entered into an Inter-Governmental
Agreement (IGA) with USA in 2015 for sharing of financial account information on automatic basis.
(vii) Effective enforcement actions have been undertaken including expeditious investigation in
foreign assets cases on the basis of information received under Automatic Exchange of Information.
Such actions include searches, surveys, enquiries, assessment of income, levy of taxes, penalties, etc.
and filing of prosecution in criminal courts, wherever applicable.
(viii) Extensive use of information technology and data analytics tools for identification of high-risk
cases, expeditious e-verification of suspect cases and consequential enforcement actions in appropriate
cases have been undertaken.
(ix) The Government has brought in a large number of legislative provisions in the Income Tax
Act, 1961 to effectively tackle the menace of black money.
(x) The Government has mandated the linking of Aadhaar with PAN, which will not only help in
de-duplication of PAN but will also prevent potential tax frauds.
(xi) The NUDGE (Non-Intrusive Usage of Data to Guide and Enable) Taxpayers Campaign was
launched by the Income Tax Department in November 2024 to improve taxpayers’ voluntary
compliance for declaration of foreign income and assets. Under the campaign, informational messages
were sent via SMS and email to selected resident taxpayers in respect of whom information has been
received under the Automatic Exchange of Information that they are holding foreign assets and/ or
having income from foreign sources, to accurately report foreign assets and income from foreign
sources in their Income Tax Returns. Total of 24,678 taxpayers reported their foreign assets and
income in revised ITRs for AY 2024-25, while 5,483 taxpayers filed belated returns reporting foreign
assets worth ₹29,208 crore and foreign income of ₹1,089.88 crore.
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