Government constitutes inter-departmental task force to crack down on benami firms

Government constitutes inter-departmental task force to crack down on benami firms


  • The Union Government has constituted inter-departmental task force comprising members of various regulatory Ministries and enforcement agencies to crack down on benami firms.
  • It is first major post-demonetisation move undertaken by Government for unearthing black money from shell companies used for large-scale money laundering and tax evasion.
  • The task force will be headed by Revenue Secretary and Corporate Affairs Secretary to monitor the actions taken by various agencies.
  • The involved agencies will invoke the stringent Benami Transactions (Prohibition) Amendment Act, 2016 against the shell companies and freeze their accounts and strike off the names of dormant companies.
  • It will also initiate disciplinary action against professionals abetting the companies and entry operators, who are used to launder unaccounted-for incomes into the banking system for projecting them as white money.
  • There are about 15 lakh registered companies in India, but only 6 lakh of them file their annual returns.
  • It has raised suspicion that a large number of these companies are indulging in financial irregularities. During a small sample analysis of such companies conducted by Government has found that Rs.1,238 crore in cash was deposited in these entities during the November-December 2016 period, after demonetisation.
  • It also has been found that 560 beneficiaries have laundered money to the extent of Rs. 3,900 crore with the help of 54 professionals, who have been identified by the Government.
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