Government has no plans to bring a new amnesty scheme for tax evaders and wants to amend the Indo-Mauritius tax treaty to curb its abuse by companies, the Rajya Sabha was informed on Tuesday.
"We are not enamoured by (suggestions for) another voluntary disclosure system," Finance Minister Pranab Mukherjee said during Question Hour.
VDS schemes in the past offered amnesty to people declaring black money and paying tax.
But VDS schemes cannot be hugely successful unless the rate of tax under the amnesty is lower than the prevailing income tax rates, he said.
This policy has been criticised as it amounted to penalising honest tax payers by asking them to pay tax at higher rates.
Mukherjee said the government was seeking amendment to the Indo-Mauritius tax treaty of 1980 wherein offshore firms resident in Mauritius are exempt from tax on capital gains.
Mauritius wants to position itself as a financial hub and does not tax companies including foreign institutional investors registering with it for investing in overseas markets such as India. In 2000, OPED termed Mauritius as a nation which offers 'unfair tax competition.'
"We want to amend the particular agreement with Mauritius," Mukherjee said, adding New Delhi has offered to compensate the island nation for any loss in revenues because of such change in the treaty to check companies evading paying taxes both in India and Mauritius.
Mukherjee said the government was committed to unearthing black money within and outside the country.
In that direction, the Government has initiated dialogue with Swiss authorities to elicit information on black money stashed in Swiss banks.
Swiss banks had till now taken a position that no information will be divulged, but as consequence of the global economic meltdown, there is pressure from the group of developed and industralised nations OECD for more transparency, he said.
Double tax avoidance agreements are being sought to be revised to plug loopholes, he said. India has double tax avoidance agreements with 76 countries, including Mauritius and Switzerland.
"Swiss authorities, I am told, have agreed for negotiations (on the issue)," he said. "We have already taken it (the issue of black money) not only with Swiss authorities but other nations as well."
Many a time information is shared by concerned nations but they make it obligatory not to reveal it to the public, he said.
"Government is going to unearth black money," he said, adding search and seizure, surveys and computerised scrutiny of information were tools in the hand of the government to bring unaccounted money back into system.
On the question of the sensational Hassan Ali Khan case, Mukherjee said tax department after rigourous scrutiny has arrived at the conclusion that some money had been deposited in the Swiss banks.
The government was seeking advice for issuing letters rogatory to get necessary information from the Swiss authorities, he said.
Mukherjee said government has not commissioned any study since the one conducted in 1985 by the National Institute of Public Finance and Policy, to make an assessment of the black money in and outside the country. The NIPFP study had estimated between Rs 31,584 crore (Rs 315.84 billion) and Rs 36,786 crore (Rs 367.86 billion) black money in the country in 1983-84.
Studies by private individuals have made varying assessments. "No precise amount has been arrived at... it is true that government did not take initiative to quantify the black money (since the 1985 study)," he said.