The Income-tax Act, 1961 is the charging Statute of Income Tax in India.

It provides for levy,

administration, collection and recovery of Income Tax. Recently the Government of India has
brought out a draft statute called the "Direct Taxes Code" intended to replace the Income Tax
Act,1961 and the Wealth Tax Act, 1956. Public Commentary has been called for the Draft Bill.[1]
The redrafted bill is supposed to be made public soon.

Scope of Total Income

1) Subject to the provisions of this Act, the total income of any previous year of a person
who is a resident includes all income from whatever source derived which(a) is
received or is deemed to be received in India in such year by or on behalf of such person ;
or(b) accrues or arises or is deemed to accrue or arise to him in India during such year ;
or(c) accrues or arises to him outside India during such year :Provided that, in the case of
a person not ordinarily resident in India within the meaning of sub-section (6) of section
6, the income which accrues or arises to him outside India shall not be so included unless
it is derived from a business controlled in or a profession set up in India.(2) Subject to the
provisions of this Act, the total income of any previous year of a person who is a nonresident includes all income from whatever source derived which(a) is received or is
deemed to be received in India in such year by or on behalf of such person ; or(b) accrues
or arises or is deemed to accrue or arise to him in India during such year.Explanation 1.
Income accruing or arising outside India shall not be deemed to be received in India
within the meaning of this section by reason only of the fact that it is taken into account
in a balance sheet prepared in India.Explanation

2.For the removal of doubts, it is hereby declared that income which has been included
in the total income of a person on the basis that it has accrued or arisen or is deemed to
have accrued or arisen to him shall not again be so included on the basis that it is received
or deemed to be received by him in

Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India enacted to
prevent money-laundering and to provide for confiscation of property derived from moneylaundering.[1][2] PMLA and the Rules notified there under came into force with effect from July 1,
2005. The Act and Rules notified there under impose obligation on banking companies, financial
institutions and intermediaries to verify identity of clients, maintain records and furnish
information in prescribed form to Financial Intelligence Unit - India (FIU-IND).[3]
The act was amended in the year 2005, 2009 and 2012.[4]
Contents

1 Objectives

2 Key definitions

3 Salient features

3.1 Punishment for money-laundering

3.2 Powers of attachment of tainted property

3.3 Adjudicating Authority

3.4 Presumption in inter-connected transactions

3.5 Burden of proof

3.6 Appellate Tribunal

3.7 Special Court

3.8 FIU-IND

4 Similar laws in other countries

o

4.1 Money Laundering Control Act of 1986

4.2 PATRIOT Act

5 References

Objectives

The PMLA seeks to combat money laundering in India and has three main objectives:

To prevent and control money laundering

To confiscate and seize the property obtained from the laundered money; and

To deal with any other issue connected with money laundering in India. [5]

Key definitions

Attachment: Prohibition of transfer, conversion, disposition or movement of

property by an appropriate legal order. [6]

Proceeds of crime: Any property derived or obtained, directly or indirectly,

by any person as a result of criminal activity relating to a scheduled offence.
[7]

Money-laundering: Whosoever directly or indirectly attempts to indulge or

assist other person or actually involved in any activity connected with the
proceeds of crime and projecting it as untainted property. [8]

Payment System: A system that enables payment to be effected between a

payer and a beneficiary, involving clearing, payment or settlement service or
all of them. It includes the systems enabling credit card, debit card, smart
card, money transfer or similar operations.[9]

Salient features
Punishment for money-laundering

The act prescribes that any person found guilty of money-laundering shall be punishable with
rigorous imprisonment from three years to seven years and where the proceeds of crime involved
relate to any offence under paragraph 2 of Part A of the Schedule (Offences under the Narcotic
Drugs and Psychotropic Substance Act, 1985), the maximum punishment may extend to 10 years
instead of 7 years.[10]
Powers of attachment of tainted property

Appropriate authorities, appointed by the Govt of India, can provisionally attach property
believed to be "proceeds of crime" for 180days. Such an order is required to be confirmed by an
independent Adjudicating Authority.[11]
Adjudicating Authority

The Adjudicating Authority is the authority appointed by the central government through
notification to exercise jurisdiction, powers and authority conferred under PMLA. It decides
whether any of the property attached or seized is involved in money laundering.[12]
The Adjudicating Authority shall not be bound by the procedure laid down by the Code of Civil
Procedure,1908, but shall be guided by the principles of natural justice and, subject to the other
provisions of PMLA. The Adjudicating Authority shall have powers to regulate its own
procedure.[13]

Presumption in inter-connected transactions

Where money-laundering involves two or more inter-connected transactions and one or more
such transactions is or are proved to be involved in money-laundering, then for the purposes of
adjudication or confiscation, it shall presumed that the remaining transactions form part of such
inter-connected transactions.[14]
Burden of proof

A person, who is accused of having committed the offence of money laundering, has to prove
that alleged proceeds of crime are in fact lawful property.[15]
Appellate Tribunal

An Appellate Tribunal is the body appointed by Govt of India. It is given the power to hear
appeals against the orders of the Adjudicating Authority and any other authority under the Act.[16]
Orders of the tribunal can be appealed in appropriate High Court (for that jurisdiction) and
finally to the Supreme Court[17]
Special Court

Section 43 of Prevention of Money Laundering Act, 2002 (PMLA) says that the Central
Government, in consultation with the Chief Justice of the High Court, shall, for trial of offence
punishable under Section 4, by notification, designate one or more Courts of Session as Special
Court or Special Courts for such area or areas or for such case or class or group of cases as may
be specified in the notification.
FIU-IND

Financial Intelligence Unit India (FIU-IND) was set by the Government of India on 18th
November, 2004 as the central national agency responsible for receiving, processing, analyzing
and disseminating information relating to suspect financial transactions. FIU-IND is also
responsible for coordinating and strengthening efforts of national and international intelligence,
investigation and enforcement agencies in pursuing the global efforts against money laundering
and related crimes. FIU-IND is an independent body reporting directly to the Economic
Intelligence Council (EIC) headed by the Finance Minister.[18]
Similar laws in other countries
Money Laundering Control Act of 1986
Main article: Money Laundering Control Act of 1986

This is an Act of the United States Congress that made money laundering a Federal crime. It for
the first time in the United States criminalized money laundering.[19]

Established money laundering as a federal crime

Prohibited structuring transactions to evade CTR filings

Introduced civil and criminal forfeiture for BSA violations

Directed banks to establish and maintain procedures to ensure and monitor

compliance with the reporting and record keeping requirements of the BSA. [20]

PATRIOT Act
Main article: PATRIOT Act

This is an Act of the United States Congress. The act, as a response to the terrorist attacks of 11
September, significantly reduced restrictions in law enforcement agencies' gathering of
intelligence within the United States; expanded the Secretary of the Treasurys authority to
regulate financial transactions, particularly those involving foreign individuals and entities; and
broadened the discretion of law enforcement and immigration authorities in detaining and
deporting immigrants suspected of terrorism-related acts. The act also expanded the definition of
terrorism to include domestic terrorism, thus enlarging the number of activities to which the USA
PATRIOT Acts expanded law enforcement powers can be applied.[21]