Among many shades of corruption that came to fore during the UPA regime, the issue of black money stashed away in foreign banks by Indian nationals in contravention of Income Tax rules and regulations has created many ripples in political and Government circles. For quite some time there have been rumours that enormous money, mostly black, has been deposited in overseas banks especially in Swiss banks. According to the rules of the Government of Switzerland, since it is a neutral country, its banks do not disclose to anybody the bank holdings of its customers nor can these holding be attached. The grapevine has that many important Indian personalities are the clients of Swiss banks and that is the reason they have deposited their monies in Swiss Banks. It will be recalled that in the course of Anna Hazare movement against corruption there was widespread demand for unearthing black money stashed by Indian citizens in foreign banks. However, the UPA Government adopted a lackadaisical attitude towards this important and explosive national issue. Some steps were taken in the shape of contacting foreign countries to provide preliminary information in this respect but no tangible action was taken. This deepened the suspicion that those who were supposed to unravel the case could also be carrying the stigma.
However, since BJP had made a commitment in its manifesto to open the issue of black money, it has become active in the case. At the same time, since the case was before the Supreme Court also as PIL, the Apex Court constituted a SIT to conduct investigation in the matter. Thus a coordinated effort began at the level of the Government and other agencies, and systematic investigation into the episode has begun. On the basis of the data passed on by the Special Investigation Team (SIT) to the Government, it is known that 24,000 instances of alleged tax evasion and dubious funds have been detected in foreign sources in the last financial year. The bulk of the information on these foreign accounts has been received from New Zealand, followed by Spain, the United Kingdom, Sweden and Denmark. Of course, the clients have their local conduits. This information has been received through proper sources as stipulated in the guidelines of Paris-based Organization for Economic Cooperation and Development (OECD) a global body setting international tax and economic policies which are followed by over 34 member countries, including India. The break-up these 24,000 pieces of data obtained under automatic tax information exchange route is also available as this: While New Zealand shared 10,372 pieces of data with Indian authorities, the share of the other countries was: Spain (4,169), UK (3,164), Sweden (2,404), Denmark (2,145), Finland (685), Portugal (625), Japan (440) and Slovenia (44).
There are more companies that responded to India’s request with relatively smaller pieces of data in the last fiscal include Australia, Mexico, Italy and Trinidad and Tobago.
Now that these foreign countries are cooperating and providing the information needed by the Indian authorities, the natural course is that the Central Board of Direct Taxes will examine whether income tax rules applicable to these bank deposits abroad have been observed by the depositors or not. On the information collected after verification, it will be decided by competent authorities what portion of deposits/credits have been evaded for taxation and how much would be the amount of tax the parties will have to pay. At the same time other rules of Income Tax Department like deliberate tax evasion etc. will also be enforced. The more important question that will arise is the source of this income and it is only the taxman who will be able to tell us the source, if at all there is a source.
Finance Ministry; Central Board of Direct Taxation is reported to have developed a mechanism of direct liaison with foreign tax authorities and this is likely to make detection of non-payment of axes easier. All these mechanisms apart, what we bring under focus is the dwindling sense of patriotism and nationalism among some of the Indians who can be alleged to have committed the double crime of evading taxation and stashing money in foreign banks. It is a shame and humiliation that when the nation is deeply engaged in developmental efforts on various levels and is in bad need of funds to ensure smooth completion of these projects, an affluent class of our society has misused their office and influence for personal aggrandizement. This has given rise to a rich and neo-rich class in the society severely disrupting its economic balance. If Modi Government is able to retrieve the money that belongs to the people of India and then invests this in developmental works like health, education, science, technology, roads and railways and research institutes etc. it will almost writing a golden chapter in the contemporary history of the country. Exemplary punishment to tax defaulters and black money makers and depositor of Indian money in foreign banks where it has immunity, is the need of the hour.
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