New Delhi: Under pressure to bring back unaccounted money stashed abroad, the Government on Friday said it will set up tax overseas units in eight countries, including the US, France and Germany, this financial year.

"The proposal is being processed and (eight) Income Tax Overseas Units (ITOUs) are likely to be set up within the present financial year 2011-12," the Minister of State for Finance S S Palanimanickam told the Lok Sabha in a written reply.

Cyprus, Japan, UK, The Netherlands and United Arab Emirates are the other countries where the government wants to establish ITOUs.

The government, Palanimanickam said, had earlier set up ITOUs at Mauritius and Singapore.

He said the government has framed a five-pronged strategy to fight the menace of tax evasion that include joining hands with international bodies like G-20 and United Nations,
besides forming appropriate legislations, setting up domestic institutions, and manpower training.

Further, in reply to a question, he said investigations were carried out on some persons who had travelled to tax havens.

"Instances were found where assesses had filed return of income of less than Rs One lakh," the minister said of such cases.

The government has also approved the cadre restructuring of the Directorate of Enforcement for increasing its effectiveness in implementing the provisions of the Prevention of Money Laundering Act and the Foreign Exchange Management
Act.

"The approval includes increase in staff strength from 745 to 2,064 and the number of offices from 22 to 39. This is likely to involve an expenditure of about Rs 60 crore annually.
The restructuring process of the Directorate of Enforcement is likely to be completed in 2-3 years," Palanimanickam said.

On illicit wealth, the minister said there was no data on the black money sent abroad and then again brought back to the country using loopholes in the tax structure.

"However, appropriate action as per the provisions of the Direct Tax laws is taken whenever credible information with regard to tax evasion, including in real estate and other businesses, is received by the Income Tax department," he said.

Palanimanickam also informed Lok Sabha that government has commissioned a study to estimate the quantum of unaccounted wealth, both inside and outside the country, and
its ramifications on the national security based on recommendations of the Standing Committee on Finance.

The study will be conducted separately by three national level institutes -- the National Institute of Public Finance and Policy (NIPFP), the National Institute of Financial
Management (NIFM) and the National Council for Applied Economic Research (NCAER).

"Memorandums of Understanding have been signed with the institutes on March 21. The study is expected to be completed in a period of 18 months," Palanimanickam said.

The minister said work was in progress with regard to amendment of the Double Taxation Avoidance Agreement (DTAA) between India and Switzerland.

"The Amending Protocol between India and Switzerland, which seeks to amend the existing DTAA between the two countries, was signed on August 30, 2010 and is ready to enter
into force from the Indian side. The Amending Protocol will, however, enter into force only after Switzerland completes its internal processes," he said.

Upon entry into force, the amended protocol will allow India to obtain banking information, as well as information without domestic interest, from Switzerland in specific cases for a period starting from April 1, 2011.

Palanimanickam said the government's proactive stance in various fields have started showing results.

"Information regarding details of asset and payments received by Indian citizens in several countries has started flowing in now under different stages of processing and
investigation," he said.

(Agencies)