500 Indian names on list; Jaitley warns ‘adventurism will be costly’
500 Indian names on list; Jaitley warns ‘adventurism will be costly’
Prime Minister Narendra Modi on Monday directed the setting up of a special multi-agency group to probe and take action in the light of reports that some 500 Indians, including top filmstars, politicians and businessmen, had allegedly stashed money in offshore entities in tax havens.
The special investigation team on black money also said it will thoroughly investigate the “Panama Papers”, the reported secret list that was exposed by the International Consortium of Investigative Journalists, in collaboration with several publications across the globe, and pertains to offshore investments by a number of individuals and companies.
“As per the directions of the Prime Minister given today, a special multi-agency group is being constituted today consisting of officers from the investigative Unit of the Central Board Direct Taxes, the Financial Intelligence Unit and the Foreign Tax and Tax Research Division and a representative of the Reserve Bank,” finance minister Arun Jaitley said after a meeting with the Prime Minister.
He said the group will monitor the flow of information in each one of the cases and inform the PM and the finance ministry. Mr Jaitley said the PM had directed strict action should be taken against whoever was found guilty of violating Indian laws.
“The government will take all necessary action as required to get the maximum information from all sources, including from foreign governments, to help in the investigation process,” the finance minister said. Mr Jaitley said he expected more names to crop up over the next few days.
The finance minister said those who did not take advantage of the compliance window last year to declare illegal assets overseas will find “such adventurism extremely costly”. He said global initiatives to deal with the menace of unaccounted wealth abroad will be in place by 2017, and then it would become extremely difficult for individuals to hide assets. “With G20 initiatives, FATCA and bilateral transactions in place with effect from 2017, the world is going to be a far more transparent institution and therefore this kind of an adventurism will prove to be extremely costly for those who have indulged in it,” said Mr Jaitley.
Last year, during the 90-day compliance window that ended on September 30, the government had received disclosures of undeclared overseas wealth totalling Rs 4,147 crores. Those wanting to come clean were required to pay 30 per cent tax and 30 per cent penalty.
“The compliance window operated (and) many availed... but probably some didn’t. Today when I see contrarian reports appearing (in the media), which are not only impacting India... which are impacting the rest of the world. I think it is a stern reminder to all of us,” said Mr Jaitley.
He said in the past too, based on investigative journalism by ICIJ in 2013, in which the links of 700 Indians were shown to have business connections with offshore entities, the department of revenue was able to identify 434 among them as Indian residents. “Some 184 persons out of these have also admitted their relationship with such offshore entities/transactions. Although, in the previous report of the ICIJ, information relating to financial transactions/ bank accounts was not available, government authorities have detected credit in the undisclosed foreign accounts of such Indian persons in excess of Rs 2,000 crores. 52 prosecution complaints under the provision of the Income-Tax Act have been filed against offenders so far,” added Mr Jaitley.
He said similarly, in response to information received in 2011 from France relating to bank accounts of 628 Indian persons in HSBC, Switzerland, a lot of progress had been made in the investigation. “Out of the list, 569 persons have been traced. However, in the information received, the details of HSBC amounts were shown against 339 persons. Out of the 628, 214 were found not actionable on account of no balance or being non-residents or being non-traceable,” the finance minister said. Of the remaining cases, assessments had been completed in 390 cases, in which undisclosed income of Rs 5,018 crores and tax demands of Rs 4,584 crores had been raised. “Also, the concealment penalty of Rs 1,213 crores has been levied in 157 cases. Also, 154 prosecution complaints have been filed in HSBC cases,” said Mr Jaitley.
Based on prosecution complaints of predicate offences, the ED has also initiated investigations in 23 HSBC cases and 20 cases of the ICIJ expose of 2013, he added.
