Just depositing black money doesn't make it white: Adhia

Revenue Secretary Hasmukh Adhia today said it is wrong to assume that black money that has come into the banking system following the demonetisation will become white and unless tax is paid on such amount it will continue to be remain black.
He also said the Brics nations have pledged to automatically share tax information and adopt global standards on tax transparency to check cross border tax evasion.
"Do you think that by simply depositing the money in a bank account makes black money into white? It doesn't. Merely, black money has come into banking channel, you can't tell that the entire black money has been converted into white.

"It will become white when we charge taxes, when the income tax department is able to reach to them and issue them a notice," Adhia told reporters on the sidelines of the two- day meeting of the Brics revenue heads here.
The two-day meeting of the revenue heads of Brazil, Russia, India, China and South Africa (Brics) have also resolved to support other developing nations in increasing their tax administrations' capacity to implement the OECD/G20 standard on automatic exchange of information, Adhia said.
"We recognise the importance of the exchange of information between competent authorities in preventing cross-border tax evasion and we resolve to exchange information, both on request and on automatic basis, and to adopt global standards on tax transparency," he said.

Adhia said unless 50 per cent is paid on the unaccounted money which has come in to the banking system for the PM's Graib Kalyan Yojana, it will remain black money.

He said the people who are depositing black money into Jan Dhan accounts of others will be caught and be dealt according to the law.
When asked whether the government will ask for the source of money up to the permissible limit of Rs 2.50 lakh in every account, Adhia said it will happen only in the cases where some misuse has taken place.
"In genuine cases, there will not be any scrutiny but if there is some misuse then an inquiry will be there. For instance, if somebody has deposited 2.5 lakh in 15 accounts then we will check with those 15 account holders and trace the money," he said.

Adhia said the government will also take strict action against those bank officials and income tax officials who are helping people in laundering.
"Lot of rumors are spreading on the social media.
There is a rumour that all safe deposit vaults will be sealed and then government will confiscate the money. These are all rumours. Even there are some rumors about putting a limit on gold holding but this is also baseless," Adhia said.
There will be more steps to ensure that black money holders are unable to use that money. "But it does not mean that we will go into control Raj," the grouping said.

Expressing "deep concern" with the process of erosion of tax base by aggressive tax practices, including incomplete disclosure of information by MNCs, the group reaffirmed its resolve to work together to address them.
"We acknowledge our common understanding that profits should be taxed in those jurisdictions where the activities deriving those profits are performed and where value is created," the five-member grouping said.