India says Swiss pact will help track illegal wealth

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India said Tuesday a tax pact signed with Switzerland should help the government track illicit Indian funds parked in Swiss bank accounts.

But Finance Minister Pranab Mukherjee told parliament the measure would not be retroactive.

"The new provision will be applicable only for prospective information and not for past information," Mukherjee told parliament.

During the last election campaign in 2008, the Hindu nationalist Bharatiya Janata Party made uncovering so-called "black money" or illicit funds one of its main campaign planks.

While there is no official calculation, Indian estimates put the amount of illegal money stashed away in tax havens overseas at 140 billion dollars or higher.

Mukherjee and Swiss Foreign Minister Micheline Calmy-Rey signed the pact on Monday, revising an existing double taxation avoidance agreement between the two countries.

"This will provide us an opportunity to have the relevant bank information for taxation purposes," said Mukherjee.

Earlier in the year, Prime Minister Manmohan Singh promised that India would take every possible measure to ensure the return of illegal funds stashed in foreign tax havens.

© 2010 AFP

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