New Delhi, Jan 26 (Agencies): As a part of its strategy to control illegal money flowing out of India to tax havens abroad, the Finance Ministry has quietly rejigged work allocation at the Central Board of Direct Taxes, with Chairman Sudhir Chandra told to exclusively focus on the agency's foreign taxation wing.

The foreign taxation wing in the Central Board of Direct Taxes (CBDT) and the Directorate of International Taxation (Income Tax) are the two units of the government that are dealing with all issues related to unearthing black money and signing and revising tax treaties with various countries and tax haven nations.

According to an internal note of the Finance Ministry, the CBDT Chairman will no longer handle the zonal charge of Mumbai, which is the largest tax-paying city and contributes the maximum revenue to the government's direct taxes kitty.

The Mumbai zone charge has traditionally been held by the CBDT's top boss and it is the only city identified as a zone by the I-T department, whereas the rest of the country has been categorised into larger regions like the West and Rajasthan, North and Uttar Pradesh, East and South.

"The CBDT chairman will now not handle the Mumbai zone. He will exclusively deal with cases of international taxation and look after the flow of classified financial communication
and information from various countries," sources said, adding that the rejig has been implemented with "immediate effect" with the approval of Finance Minister Pranab Mukherjee.

The foreign taxation unit of the CBDT is also the nodal agency to receive classified tax data from treaty countries, which is sent in code as stipulated by the Organisation for
Economic Cooperation and Development (OECD).

The Mumbai zone will now be looked after by the CBDT Member (Personnel and Vigilance).

The rejig of work allocation has also put the operations of the Directorate General of Logistics -- which has been created to enable the "Income Tax Department to deal with the
challenges emerging from the new work environment" -- under the chairman's control.

"The challenges of the new work environment are nothing but the laws, rules and regulations of foreign countries, especially tax havens which do not allow extraction of tax evasion and black money data simply. This unit studies all such areas and prepares case studies for Income Tax officers dealing with Double Taxation Avoidance Agreements (DTAA) and others," sources said.

Incidentally, the I-T department is all set to operationalise eight new units in foreign shores, like the USA, United Kingdom, Netherlands, Japan, Cyprus and Germany, among others, and the officials will have to understand the tax laws of these countries.