India will get the information related to financial accounts held by Indians in Swiss banks from this year. “In addition, from 2019, India will receive on an automatic basis, information in respect of financial accounts held by Indian residents in Switzerland. The information received on request or on automatic basis may include information about persons allegedly involved in corruption,” said Minister of State for External Affairs V K Singh. India has signed an automatic exchange of information agreement with Switzerland relating to tax.
The Income Tax department has detected Rs 10,767 Crores of undisclosed income during the fiscal year 2017-18. This undisclosed income was detected in verification of Non-PAN (Permanent Account Number) data, Foreign Account Tax Compliance Act (FATCA), Automotive Exchange of Info (AEOI), and Common reporting standard (CRS) data.
The surge in the FATCA and CRS cases in the post demonetization period suggests that the bold decision of demonetizing 86 percent of Indian currency helped to curb foreign black money invested in India. Tax avoidance is a global problem, and until every country shares information about black money, concrete action cannot be taken against tax avoidance. India has cleared its stance against global black money by sharing the information about taxable income invested in the country by global financial institutions and individual investors. Now Switzerland, Mauritius and many other countries where black money by Indian people and institutions are kept/invested can share information with our taxation authorities.
The Modi government, since coming to power, has been largely successful in curbing black money transactions. Over the last three years, the Indian government took several measures to crack down on black money. After the Enactment of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 under which it provided one-time compliance window to taxpayers to make declarations of their undisclosed foreign assets, the government provided a compliance window for a declaration of undisclosed income through the Income Declaration Scheme (IDS) in 2016. This was followed by Pradhan Mantri Garib Kalyan Yojana (PMGKY) in post-demonetization phase. These various legislations have helped the country to bring down the total amount of deposits in Swiss banks. Assets worth Rs 4,100 crore were declared by over 640 persons under the black money Act, and under IDS, disclosures worth Rs 67,300 crore were made by over 71,000 persons. Under PMGKY, disclosures of about Rs 4,900 crore were made by about 21,000 persons.
Rs 1,14,110 crore worth of black money has been disclosed by the people under four years of Modi government which includes government’s income disclosure scheme (Rs 74,350), benami transactions (Rs 4,300 crore) and income tax raids (Rs 35,460 crore). Also, a drop in money stashed by Indians in Swiss banks since 2014 is close to $1.77 billion (Rs 12,139 crore). The tax collection has gone up on both direct tax and indirect tax front with the number of direct taxpayers almost doubled and the indirect tax collection also increasing substantially.
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