World

India cracks down on hidden assets

NEW DELHI In India, the wealthy have long hidden fortunes under the names of lowly-paid staff to avoid paying taxes.

But as the government broadens its crackdown on corruption, a new law promises to end the widespread practice and hundreds of suspicious bank accounts are under investigation.

Real estate lawyer Naresh Gupta told AFP that the new rules are "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 of a twin strike by the government to flush out undeclared "black money" hoarded by tax evaders.

It followed Prime Minister Narendra Modi's decision to withdraw high-value bank notes from circulation, compelling millions to join the formal banking sector for the first time.

Previously, around 90 per cent 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.

If caught, they could have their wealth seized and face seven years' jail and hefty fines. - AFP

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