A crackdown on the black money stashed abroad has finally begun with the Income Tax Department reopening the tax assessments of 50 Indians on the basis of documents received about the money they had parked illegally with one LGT Bank in the tax haven of Liechtenstein.

The move comes after a year of the UPA II government amending the Income Tax Act for the purpose, following a hue and cry by BJP veteran L K Advani to plug loopholes and get back thousands of crores of rupees lying in the foreign banks.

Notices have gone out to these account holders on the basis of the documents received from Germany in April last year about the Indian account holders in the LGT Bank. Officials say the documents have names of some high-profile Indians but their names cannot be disclosed because of the secrecy clause in the Double Taxation Avoidance Agreement (DTAA) with Germany.

The combined tax demand raised in the special re-assessment of accounts of the LGT Bank account holders in the years in which they had parked money in the bank is to the tune of Rs 100 crores. Indians are not allowed to move any money to foreign banks without the express permission of the Reserve Bank of India.

The government has also approached Mauritius to renegotiate the DTAA signed in 1984 and remove the secret clause because of which a lot many Indians are suspected to set up paper company in the island country for money laundering to fund their business in India, taking advantage of Mauritius having no capital gain tax provision.

Officials say the regular inflow of money into the Indian share markets from Mauritius has been a matter of concern, more so because the Mauritius authorities block their efforts to open up the accounts of the companies registered in their country on the basis of the secrecy clause in the tax avoidance treaty.  Similar secrecy laws and low or zero tax rates have turned Cayman Island and Isle of Man also into tax havens used by the Indians to launder their ill-gotten money, the officials said.

The Income Tax Act was amended only last year to enable the government under its Section 90 to enter into agreements with foreign countries to extract information on black money. Based on this amendment, the Central Board of Direct Taxes (CBDT) has written to Mauritius and 64 other countries with which India has DTAA to revise them for transparency.

It has also written to nine other known tax havens for agreements for exchange of information for prevention of evasion or avoidance of the income tax. They include bermuda, British Virgin Islands, Gibraltar, Macau, Bahrain, Seychelles and Congo. Hong Kong, which is now administered by China, has also been notified as a specified territory for entering into a DTAA as increasing amounts of money are routed to India from this territory.