The Income Tax department has claimed to break a nexus of Hawala operators based out of Delhi. These operators were running money laundering racket with an estimated worth of 20,000 crore rupees. The Delhi unit of Income Tax department conducted a series of raids in Old Delhi during the last week. The I-T department found that three groups of operators were carrying out illegal financial activities.
One group which operated from Naya Bazar area of Old Delhi has floated dozens of bogus entities to provide fake bills. The group has issued bogus billings worth around 18,000 crore rupees through floated entities.
The second group was a money laundering racket which deals with share markets. The transaction in well-known shares was being camouflaged as sale of old shares. The beneficiaries claimed the earned money to be long term capital gains (LTCG). The scam is estimated to be around 1,000 crore rupees. “This figure appears to be the tip of the iceberg. This modus operandi has been found to be going on for many years,” said an official.
The fraudsters were not involved only in the area of direct tax but they also cheated the indirect tax code, GST. “Undisclosed foreign bank accounts and a well-established racket of claiming bogus duty drawback/GST through over-invoicing of exports,” said the official. “Preliminary estimate of such bogus exports is more than Rs 1,500 crore,” he added.
The total amount of black money unearthed by Income Tax officials in the last few days from the old Delhi area is 20,000 crore rupees. The Modi government has vowed to take strong measures to curb black money and use the collected amount for the benefit of the poor and downtrodden population of the country.
The first step the government took to curb black money was through Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, under which it provided a one-time window for compliance from July 1 to September 30 in 2015 — to those who had undisclosed foreign assets. Under this scheme, Rs 4,100 crore worth of assets in total was disclosed by 650 people. After this, the government brought the Income Declaration Scheme (IDS) in which anyone who had not disclosed their income or assets honestly in the previous assessment year got a chance to disclose it. Under this scheme, 64,275 people disclosed Rs 65,250 crore under the IDS. The last scheme to disclose black money was the Pradhan Mantri Garib Kalyan Yojana (PMGKY) in December 2016, under which assets worth Rs 5,000 crore were declared.
So Rs 1,14,110 crore worth black money has been disclosed by the people under four years of Modi government which includes government’s income disclosure scheme (Rs 74,350), benami transactions (Rs 4,300 crore) and income tax raids (Rs 35,460 crore). Also, a drop has been registered in money stashed by Indians in Swiss banks since 2014 is close to $1.77 billion (Rs 12,139 crore). The tax collection has gone up on both direct tax and indirect tax front with the number of direct taxpayers almost doubled and the indirect tax collection also increasing substantially. The increase in the collection has given the government fiscal space to spend money on infrastructure, health, education, and other welfare schemes. Although the war against black money does not end here because the estimated amount of black money is still a quarter of the country’s 2.7 trillion GDP.