The Finance Ministry has set up a Directorate of Income Tax (Criminal Investigation) to investigate criminal offences under direct tax laws, the Parliament was informed today.

"The Directorate of Income Tax (Criminal Investigation) is mandated to perform functions in respect of criminal matters having any financial implication punishable as an offence under any direct tax law," Minister of State for Finance SS Palanimanickam said in a written reply in the Lok Sabha.

The directorate will also investigate the source and use of funds involved in such criminal activities.

In a separate reply, Palanimanickam said the tax department is in the process of collating data on the indirect tax evasion by pharmaceutical companies.

"The information relating to evasion of tax by pharmaceutical companies is being collected," he said.

In another reply, he said the Enforcement Directorate has initiated an investigation into the suspected contraventions of Foreign Exchange Management Act, 1999, involving certain individuals and entities based in Kolkata.

"Investigations are currently underway and as such it would not be appropriate in the interest of investigation to divulge details of cases at this stage," Palanimanickam said.