At present, tax evasion is a civil offence in the country and offenders are prosecuted under relevant sections of the Income Tax Act, which largely talks about penalties with only some "wilful" default cases inviting prosecution and a jail term.
"With the offence of concealment of income or evasion of tax in relation to a foreign asset proposed to be made a predicate offence under the Prevention of Money Laundering Act, India will join the league of those few countries where tax evasion is a criminal offence," a senior Finance Ministry official said about the announcement in Jaitley's Budget speech.
According to the legal definition, every 'Scheduled Offence' is a predicate offence and the occurrence of the same is a prerequisite for initiating a probe into the offence of money laundering, customs duty violation or any other criminal act punishable and prosecutable in India.
The Special Investigation Team (SIT) on black money also recommended to the government in December last year that tax evasion should be made a serious "criminal offence" under Indian laws to force foreign countries to reveal the names and account details of Indians holding illicit wealth abroad.
Major international economies readily cooperate with a foreign country on tax information exchange matters if the case in question is registered under criminal laws like PMLA or Narcotic Drugs and Psychotropic Substances Act.