New Delhi, Jul 24 (PTI) : To check the black money menace, the Supreme Court-appointed Special Investigating Team (SIT) on Friday recommended enacting tough laws to curb betting in cricket, bring donations to education and religious bodies under tax net, monitoring unusual rise in stock prices and regulating P-Notes.

The SIT identified circular trading in shares, overseas investments being routed through P-Notes from tax havens, shell companies, mispricing of imports and exports and cricket betting as major sources of black money generation.

Stating that betting in cricket has become sophisticated with use of technology, SIT wanted "some appropriate legislative directions or rules or regulations" to curb the menace of betting.

With half of the Rs 2.7 lakh crore overseas investment using P-Notes coming through tax havens of Cayman Islands, Mauritius and Bermuda, the SIT on black money wanted market regulator SEBI to come up with regulations so as to be able to identify the final beneficiary of Participatory Notes.

P-Notes are instruments issued by FIIs to overseas investors wanting to invest in Indian stock market without registering themselves with the regulator.

SIT said action be taken under Prevention of Money Laundering Act (PMLA) against trade based money laundering through mispricing of imports/exports.

The panel headed by Justice MB Shah (retd) in its third report has also suggested measures to ensure donations by cheques to prevent black money generation in education sector, religious bodies and charities, and sought prosecution of those donating and accepting unaccounted money under the anti-corruption law.

The SIT said person accepting unaccounted money in form of donation or also donor "requires to be prosecuted under Prevention of Corruption Act".

For this, the panel said it would require legislative change which is necessary because now–a–days donation to educational institutions, which are in demand, is rampant.

"In some cases, it goes to Rs 1 crore and more. This would go long way in curbing the generation and circulation of black money," the report said.

The SIT has also Sebi to compulsorily identify real owners of foreign funds coming through the controversial P-Note route and also prosecute those using equities for tax evasion.

The panel further said it is not enough for Sebi to ban individuals and companies from stock markets and the regulator needs to initiate prosecution proceedings and take all necessary "preventive and punitive" actions.

To prevent misuse of exemption on Long Term Capital Gains (LTCG) tax for money laundering, the panel has suggested a slew of measures such as having an "effective monitoring mechanism" by Sebi to study such unusual rise of stock prices.