The government said it would comply with the order and provide the names — which could total many hundred — to the court in a sealed envelope.
“The government shall place the list before the court because the government has already given it to the court-constituted Special Investigating Team,” Finance Minister Arun Jaitley told reporters.
He did not say whether the government would make the list public.
The right-wing Bharatiya Janata Party, which took power in May, had accused the previous Congress government of failing to get tough on the issue that has become a political lightning rod.
On Monday, the government disclosed to the court names of seven people and one company it said were being prosecuted over accusations of concealing foreign assets from income-tax authorities.
But critics accused the government of “drip-feeding names” and seeking to shield powerful people prompting Tuesday’s Supreme Court order.
“Why are you trying to protect people having bank accounts in foreign countries?” Supreme Court chief justice H.L. Dattu asked government lawyers on Tuesday.
Indian rumour mills have been in overdrive about who may be on the so-called “black money list”, including corrupt politicians and major business tycoons.
“The truth about these names and also these accounts must come out so that penal action can be taken against the people and the money lying there can be brought back to India,” Jaitley said.
Those named so far — who include Pradip Burman, a former director of India’s prominent Dabur food group — have denied breaking the law.
Jaitley said Monday the government wanted to only release the names of people against whom it had “prosecutable evidence”.
Opponents of making the names public say some of the individuals may have legitimate accounts abroad and releasing their identities would unfairly tarnish reputations.
In 2011 French authorities informed India of around 700 Indians with Swiss accounts. The information came from a data leak by a bank employee.
Other people are believed to have bank accounts in tax havens such as Lichtenstein and the British Virgin Islands.
The judge’s ruling follows petitions from legal activists who have been aggressively seeking the disclosure of the names.
There is no firm estimate of the amount of untaxed black money in foreign bank accounts but anti-corruption activists believe it totals hundreds of billions of dollars. -AFP