Billions in Black Money

A family of four Indians told the government they evaded tax on $29 billion of income. That fortune of black money would make them wealthier than the nation’s richest man.

The Mumbai-based family including the patriarch, his wife, son and sister together declared 2 trillion rupees. This is more than Mukesh Ambani’s $21 billion of wealth. It happened during a government program offering amnesty on undisclosed income, locally known as black money, the Ministry of Finance said in a statement on Sunday. Another man from Prime Minister Narendra Modi’s home state of Gujarat revealed 138.6 billion rupees of illegal income. The ministry rejected both the declarations.

After due inquiry, it was found that these were persons of suspicious nature and very small means and the declarations could have been misused,” according to the statement. The department has since started a probe “to determine the intention behind these false declarations.

modi-black-moneyModi is attempting to fulfill his election pledge of unearthing black money. In September he offered tax evaders an amnesty in exchange for a one-time levy of 45 percent on their income. That program led to a disclosure of 673.8 billion rupees of illegal income. Thus number excluded the two cases rejected by the Finance Ministry. Modi last month invalidated 86 percent of the nation’s currency in circulation in yet another effort to root out illegal income stored in cash.
Mumbai’s Sayed family gave their address in an affluent Mumbai suburb. But older information with the tax authorities showed three of the four lived in the city of Ajmer, in the Indian state of Rajasthan. They only changed their address in September, according to Finance Ministry’s statement.

Mahesh Shah, from Ahmedabad in Gujarat, was questioned by tax officials on Sunday, NDTV reported citing a tax official. Shah had earlier told a local language TV channel that the money wasn’t his and that it belonged to various politicians, bureaucrats and builders, NDTV reported. Is this a new way of laundering black money?



Sylvain Goldberg – on black money in India