India's Prosecution Efforts Boosted With Swiss Bank Account Details

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The government's drive against black money stashed abroad gained momentum as it received the first set of Swiss bank account details under the AEOI framework.

Written By Akhil Oka | Mumbai | Updated On:

By obtaining the first set of Swiss bank account details of Indians under the automatic exchange of information (AEOI) framework, the government’s efforts to tackle the menace of black money have finally borne fruit. Switzerland’s Federal Tax Administration (FTA) has been responsible for sharing this data with not just India, but also 74 other countries. However, the FTA spokesperson refused to share specific details about account holders or the total quantum of stashed wealth due to strict confidentiality clauses. The information shared with India includes name, address, state of residence, account balance and so forth. 

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The fight against black money stashed abroad 

After assuming office in May 2014, the Narendra Modi-led BJP government at the Centre formed a Special Investigation Team (SIT) to end the scourge of black money. Subsequently, the government launched a diplomatic outreach to several countries seeking information on suspicious accounts of Indian citizens. The Double Taxation Avoidance Agreement (DTAA) with Mauritius was amended to ensure that the government could tax the capital gains from sale or transfer of shares of an Indian firm acquired by a Mauritian tax resident. This was a step towards curbing the generation of black money via the Mauritius route. Meanwhile, in 2018, Finance Minister Arun Jaitley announced that India had inked a treaty with Switzerland regarding the real-time flow of information after the latter amended its domestic laws.

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Possible implications 

According to officials, the information in the first tranche includes details of businessmen and even non-Resident Indians settled in the US, the UK, Latin American countries and other regions. Apart from this, India is scheduled to obtain critical inputs regarding nearly 100 old accounts, which were closed before the treaty was signed. Switzerland will provide this assistance under the old framework. This will apply to cases where Indian authorities handed over prima facie evidence of tax-related wrongdoings. Sources suggest that most of these accounts belong to Indians involved in domains such as real estate, jewellery, chemicals, textiles, etc. In August, a Swiss delegation visited India and both sides agreed to speed up the process involved in the sharing of tax information. The latest development will bolster the government especially as it heads into a new round of elections. For, fighting black money has been a manifesto promise for the BJP since the last few years. 

(With PTI inputs)

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