Finance Minister Arun Jaitley said on Tuesday that India will soon rework its tax treaty with Singapore.
He also said the government has ordered to look into numerous political parties that may have been set up just to claim tax exemptions and money conversion.
Mauritius, Cyprus and Singapore had become routes for round tripping of “local money going out and then coming back by that route and therefore avoiding tax,“ Jaitley said at a Times Now function. India has already amended its tax treaties with Mauritius
and Cyprus and is set to rework the one with Singapore too.
“With Singapore we are almost at the final stages of revising that. Something is likely to happen in near future,“ Jaitley said while pointing out that the previous UPA government had done nothing against black money in its ten-year rule.
On the issue of political funding, the FM said since 2001 a part of political funding has come over ground, but there is a merit in the criticism that a part of the funding is still underground and invisible.
He said once the economy transforms into a less-cash economy , donors of political parties won't have that kind of money to donate.“We will fund you, but we will fund you by cheque,“ the donors are likely to say, Jaitley said.
He said there are about 60 political parties that effectively contest elections in India at the central or state level. “We have a large number of political parties that get registered not for contesting elections but for availing tax exemptions,“ he said.
The government is already looking into such practice, the FM said. “I have already asked the revenue secretary to look into this and therefore we will have to put a threshold criteria so that we are able to eliminate those which are not real political parties
but have come in only for money conversion,“ he said. - www.economictimes.indiatimes.com [21-12-2016]