The high level committee set up to look into ways of curbing black money and its illegal transfer abroad as also its recovery, at its first meeting today, decided to treat tax evasion as a criminal offence, reports citing source close to the developments said.
The committee, headed by CBDT chairman Prakash Chandra, was set up last month to look at ways to strengthen laws to curb generation of black money in India, and its illegal transfer abroad and recovery.
Source said the suggestion of making tax evasion a criminal offence had been floated in the past too, but the department had stayed away from the move as it anticipated a public uproar.
However, the proposal is back on the table thanks to the pressure on the government to crack down on black money. It is also believed that it might be required to amend the existing law - Prevention of Corruption Act.
The source said the move would act as a strong deterrent to tax evasion. At present, tax evaders can simply pay tax and penalty and walk away as tax evasion is a civil offence.
The government may also review the Foreign Exchange Management Act (FEMA), Prevention of Money Laundering Act and laws dealing with indirect taxes. With the liberalisation, FEMA replaced Foreign Exchange Regulation Act (FERA), under which an offender could be put behind bars for even minor offences.
The committee is also likely to review the Central Excise Act, the source said.
The meeting was held in the backdrop of the government taking much flak from civil society and opposition for being lax in the fight against black money.