Taxmen expand money laundering probe to unlisted companies as well

NEW DELHI: Shell companies being used as carriageways for laundering money are under the tax department’s scanner. Officials say such companies, which exist only on paper or have a minimal physical presence, are typically used to convert hard cash into white money by fudging tax entries, giving out salaries against delivery of goods and services, etc.

The department has asked its field officers to look at both listed and unlisted companies.

Two tax officials told HT that the department would first focus on metros, cities and big towns, and broaden it later.

The tax department has been studying some markets in detail for the past few months. “Reviews took place in Mumbai, Ahmedabad, Bangalore, Kolkata and during investigations it was seen that many companies are run by a selective set of people by different names and addresses. The department is now studying the modus operandi.”

The sources said there is no clarity on the number of such companies.