India hunts hidden cash in corruption blitz

AFP, NEW DELHI: Mansions owned by maids, gardeners and drivers until now have aroused little suspicion in India, where the wealthy have long hidden fortunes in the names of lowly-paid staff to avoid paying tax.
But as the government broadens its crackdown on corruption, a new law promises to end the widespread practise and hundreds of suspicious bank accounts are under investigation.
"There's been an overnight change in the system," real estate lawyer Naresh Gupta told AFP, describing the new rules as "very draconian".
"Investigators can question anyone and ask any government department for information about suspects."
The law banning so-called "benami" transactions, making it illegal for assets to be hidden in another's name, came into effect in November as part a twin strike by the government to flush out undeclared "black money" hoarded by tax evaders.
It followed a shock decision by Prime Minister Narendra Modi to withdraw high-value bank notes from circulation, compelling millions to join the formal banking sector for the first time. Previously, around 90 percent of everyday transactions in India were in cash.Holding real estate in someone else's name has been a particularly popular avenue for those seeking to legitimise black money and dodge their tax dues.
Those caught out could have their wealth seized, face a seven-year jail term and pay hefty fines equivalent to 25 percent of the asset's value.
Government officials say 235 suspicious accounts were under investigation for alleged benami activity in mid February, with more than half frozen and properties seized.

India hunts hidden cash in corruption blitz

AFP, NEW DELHI: Mansions owned by maids, gardeners and drivers until now have aroused little suspicion in India, where the wealthy have long hidden fortunes in the names of lowly-paid staff to avoid paying tax. But as the government broadens its crackdown on corruption, a new law promises to end the widespread practise and hundreds of suspicious bank accounts are under investigation. Theres been an overnight change in the system, real estate lawyer Naresh Gupta told AFP, describing the new rules as very draconian. Investigators can question anyone and ask any government department for information about suspects. The law banning so-called benami transactions, making it illegal for assets to be hidden in anothers name, came into effect in November as part a twin strike by the government to flush out undeclared black money hoarded by tax evaders. It followed a shock decision by Prime Minister Narendra Modi to withdraw high-value bank notes from circulation, compelling millions to join the formal banking sector for the first time. Previously, around 90 percent of everyday transactions in India were in cash.Holding real estate in someone elses name has been a particularly popular avenue for those seeking to legitimise black money and dodge their tax dues. Those caught out could have their wealth seized, face a seven-year jail term and pay hefty fines equivalent to 25 percent of the assets value. Government officials say 235 suspicious accounts were under investigation for alleged benami activity in mid February, with more than half frozen and properties seized.