Finance Ministry probes overseas deals for tax evasion

The finance
ministry has begun its maiden investigation into over 100 offshore ‘financial
structuring deals’, undertaken by Indian business entities in foreign tax havens
to allegedly evade the taxman’s net.

The multi-pronged
probe has been undertaken by the international taxation wing of the Income Tax
department and the foreign taxation unit in the Central Board of Direct Taxes
(CBDT).

A number of
investments and deals to the tune of hundreds of crores of rupees have already
been executed in tax havens like the Mauritius, Isle of Man, Cyprus, British
Virgin Islands and Bermuda, among others.

The finance
ministry is already working to finalise Tax Information Exchange Agreements
(TIEAs) with countries like the UAE, Kuwait, Oman, Saudi Arabia, Qatar, Jordan,
Syria, China, Indonesia, Israel, Japan, Malaysia, Mongolia, South Korea and
Vietnam.

Furthermore,
Double Taxation Avoidance Agreements (DTAAs) with more than 70 countries are
being finetuned.

The I-T department
is also looking into evasion of Tax Deducted at Source (TDS) by some companies
while making payments to purchase overseas shares, but sources declined to name
the entities involved.

(Source :
Business Standard, dated 13-12-2010)

(Comment : People
shall eagerly await the tangible outcome of the probes !)