As part of the efforts to trace funds stashed abroad, the government has entered into Tax Information Exchange Agreement (TIEA) with 10 countries. In addition, it has amended Double Taxation Avoidance Agreement (DTAA) with 23 countries
New Delhi: Finance minister Pranab Mukherjee today said revenue authorities have detected tax evasion of about Rs1 lakh crore during the past 18 months as a result of international cooperation as well as domestic surveillance, reports PTI.
"Almost one lakh crore of rupees, may be a little less than that, we have been able to bring under the tax net in the last 18 months," Mr Mukherjee said while replying to the general discussion on Budget in Rajya Sabha.
Mis-pricing in international transactions to the extent of Rs33,784 crore has been detected and brought under taxation, he said, adding another Rs25,000 crore has been found during search and seizure operations in the past year-and-a-half.
Besides, he said, during assessment the Directorate of Foreign Taxation detected tax evasion of Rs34,601 crore.
"We may say it is quite inadequate and I will agree it should have been much more. But you can't say it is nothing," he said.
The detection of unaccounted wealth, Mr Mukherjee said, has become possible because of the initiatives taken by the global leaders at the Pittsburgh Summit for exchange of banking and tax-related information.
"Black money" is being generated through transfer pricing mechanism, Mr Mukherjee said, adding, "co-operation has been extended by other countries to relay the information regarding banking transactions."
As part of the efforts to trace funds stashed abroad, Mr Mukherjee said, the government has entered into Tax Information Exchange Agreement (TIEA) with 10 countries, including the Isle of Man, St Kitts and Nevis and Channel Islands, which are not sovereign jurisdictions.
In addition, he said, India has amended Double Taxation Avoidance Agreement (DTAA) with 23 countries, including Switzerland, to enable the government to seek banking information.
India has signed DTAA with 79 other countries and is in the process of revising the agreement with other nations as well.
Referring to the issue of quantum of funds stashed abroad in tax havens, the minister said, the figures, which are based on unverified assumptions, range from $500 billion to $1,500 billion.
"Astronomical figures could be quoted but we have to proceed within the legal system... Millions upon millions, billions upon billions can be quoted but it has to be accepted by the court of law," Mr Mukherjee said.
The government, he said, has set up a committee of experts to estimate the quantum of black money and suggest measures to prevent generation of unaccounted wealth.
Despite the rally today, it is not clear which way the market will move
The Indian market opened flat, tracking the weak Asian markets in the aftermath of the huge earthquake that struck the north-eastern region of Japan on Friday. Concerns over the Reserve Bank of India's (RBI) move on interest rates in its mid-quarter policy review on Thursday also kept investors on the sidelines. Metal, oil & gas and banking counters witnessed decent demand pushing the indices higher in mid-morning trade.
The marginal rise in headline inflation for February resulted in the market paring some of the earlier gains and trading was range-bound thereafter. The indices touched intra-day highs in late trade, on all-round buying support that began post-noon. The market closed a tad below the day's high.
Both the Sensex and the Nifty opened with a negative gap at 18,167 and 5,437, respectively. However, immediately thereafter, the market raced higher. There was some hesitation for a while, but eventually the indices headed higher and closed near the highs of the day at 18,439 and 5,532 respectively. The Sensex (up 1.46% or 266 points) and Nifty (up 1.58% or 86 points) closed at their best levels in eight days, both in terms of percentage and points. The advance-decline ratio on the National Stock Exchange was 913:752.
Today, the market was trading close to its extreme levels, after which there is a strong probability of a reversal.
The market breadth on the Sensex and Nifty was positive. The Sensex ended with 25 gainers and four losers, while one stock remained unchanged, and the Nifty had 46 advancing stocks and four in the declining list. The broader markets under-performed the Sensex with the BSE Mid-cap index gaining 0.49% and the BSE Small-cap index adding 0.26%.
All sectoral gauges settled in the green with the BSE Oil & Gas (up 2.24%) emerging the top gainer. Other major gainers were BSE Metal (up 2.01%), BSE IT (up 1.48%), BSE Bankex (up 1.36%) and BSE Power (up 1.27%).
Reliance Communications (up 4.36%), Tata Power (up 3.72%), Reliance Infrastructure (up 3.48%), Tata Steel (up 3.27%) and Jaiprakash Associates (up 2.68%) were the top performers on the Sensex, while Bharti Airtel (down 0.40%), Hindustan Unilever (down 0.16%), ONGC (down 0.14%) and Hero Honda (down 0.06%) ended at the bottom of the list.
India's headline inflation rose marginally to 8.31% in February, driven by high food and fuel prices, which may prompt the Reserve Bank of India (RBI) to hike interest rates when it reviews the monetary policy later this week. The inflation rate stood at 8.23% in January this year, whereas it was 9.42% in February last year.
Finance minister Pranab Mukherjee has expressed the hope that inflation should come down to 7% by the month-end. He pointed out that monthly fluctuations in inflation do not give a correct picture.
Markets in Asia settled mixed with the Nikkei 225 suffering its biggest single-day decline in two years, dipping to its lowest level since November 2010. Japanese automobile, electronics and oil refining companies led the index lower, as most facilities have shut down after the tragedy that has destroyed infrastructure in the northeast region.
Other markets in the region were stable, implying that the earthquake will not have an immediate effect in neighbouring economies. The South Korean market was lifted on speculation that steelmakers would have to cope up with increased demand from Japan.
The Nikkei 225 sank 6.18%, the KLSE Composite shed 0.02%, the Straits Times declined 0.26% and the Taiwan Weighted lost 0.56%. The Shanghai Composite gained 0.17%, the Hang Seng rose 0.41%, the Jakarta Composite advanced 0.78% and the Seoul Composite surged 0.80%.
Back home, foreign institutional investors were net sellers of equities worth Rs243.58 crore on Friday, whereas domestic institutional investors were net buyers of stocks worth Rs112.24 crore.
Diamond Power Infrastructure (down 1.35%) has bagged an order worth Rs85.37 crore from Power Grid Corporation of India to supply 3,216km of 400KV HV DC line overhead conductors associated with transmission systems for Krishnapatnam UMPP (Part A). The company has also secured an order from Gayatri Projects for supply of equipment for the MPPKVVCL project. The revised order book of the company stands at Rs1,650 crore.
Educomp EduReach, the ICT division of Educomp Solutions (up 1.43%) has received a letter of intent (LoI) from the government of Maharashtra for implementation of ICT Schools Project-Phase 2 in the Nashik and Latur regions, covering 540 secondary and higher secondary schools from class V to XII. The order is worth Rs67.93 crore and it will be implemented on a build, own, operate and transfer (BOOT) model over a period of five years.
Fortis Healthcare (up 0.88%) has signed a partnership pact with TotipotentRX Cell Therapy, a leading provider of cutting- edge technologies in the stem cell and regenerative medicine market to set up centres of excellence offering cellular therapies and stem cell clinical trials, across selected Fortis hospitals. The centres will undertake stem cell clinical research relating to diabetes, cancer, cardiovascular disease and hospitals for processing stem cells before transplantation.
The Budget proposal to impose a 5% service tax on healthcare services evoked sharp reaction from the medical community which described the tax as "misery tax". Finance minister Pranab Mukherjee today said that he would respond to the representations on tax issues next week
New Delhi: Amid concerns by the medical community on the proposed service tax on healthcare, finance minister Pranab Mukherjee today said in the Rajya Sabha that he would respond to the representations on tax issues next week, reports PTI.
Following the reply of Mr Mukherjee on general discussion on the Budget, the Rajya Sabha returned the Appropriations Bills, completing the first phase of the three-stage exercise for passage of the Budget.
The Lok Sabha had earlier approved the Supplementary demands for grants for 2010-11 and relevant Appropriation Bills.
"That can be announced or decided only at the time of Finance Bill. Therefore I will request those who are agitating to wait till the Finance Bill is being approved by Parliament," he said while referring to his proposal to impose 5% service tax on high-end health care.
The Finance Bill is likely to be considered by Parliament next week. The budget session of Parliament would conclude on 25th March.
Mr Mukherjee in the budget for 2011-12 proposed to impose a service tax of 5% on all services, including diagnostic services provided by centrally air-conditioned clinical establishments having more than 25 beds for in-patient treatment.
The proposal evoked sharp reaction from the medical community which described the service tax on healthcare as "misery tax". They have also submitted representation against the proposal to the finance minister.