Black Money Routing to India

Participatory Notes is one mechanism through

which, black money is routing into India. The foreign

institutional investors (FIIS) collect funds through

participatory notes, by selling these instruments abroad.

This issue has been hotly debated in the country, that

while billions of dollars have been collected through

PNs, there has been no compulsion for FIIS to reveal the

source of these funds.

Apart from this, taking advantage from different

tax laws and tax heavens, black money holders are

successful in transferring black money into India.

Government of India had already signed Direct Taxation

Avoidance Treaties (DTATS), with different countries,

which also facilitate these people to transfer black money

into India, without paying any tax. It is notable that there

is a small country, Mauritius, with very small GDP, from

where 40 per cent of foreign direct investment comes. It

is clear that taking advantage of Indo-Mauritius DTAT,

not only foreigners, even Indian also bring their black

money into India.

New Law and Return of Black Money

Government gave opportunity to declare black

money for those who have stashed money abroad to

by naving tax and penalty at reduced rate