The Special Investigation Team (SIT) on black money, appointed by the Supreme Court has made heavy criticism on some of the visible black money transactions that are taking place under the nose of regulators.
Notable of these according to the Committee are Cricket and Educational institutions where there is rampant use of black money.
The Committee has also warned SEBI, the stock market regulator about the various types of black money transactions involved in the capital market. Most of the black money transactions are taking through legalized channels like Participatory Notes and Derivative trading.
The panel has also observed that shell companies, sham transactions, dummy firms that exist only on paper are engaging in money laundering activities.
P – Note money is mostly coming from tax havens. Of the total, approximately 31%, or Rs 85,006 crore, is from Cayman Islands, the famous tax haven.
Significant finding of the panel is that it highlights the illegal financial activities taking place in India’s sports extravaganza – the IPL.
“The Indian Premier League (IPL) has been marred by betting and spot-fixing scandals and involvement of huge amount of black money,” observed the panel.
But the committee surprisingly restricts its findings to betting and spot fixing – the two instant money turnovers related with the IPL. It notably leaves the franchise transactions and nature of investment into them.
Donations and capitation fees in educational institutions are major instances for black money. Educational institutions, religious institutions and charities, should be monitored and assessed by the tax department and should take punitive action.
Prevention of routing unaccounted money through donations is also ensured by the tax department.
The SIT was headed by Justice MB Shah and included experts from different fields including the government advisor to the SIT – former CBDT Chairman KV Chowdary. Heads of eleven organizations are members of the SIT. Follow up actions on the SIT report is unknown as it is not a government formed committee.