There is no official estimate of the exact amount of money deposited by Indian citizens and companies in Swiss banks, Union Finance Minister Nirmala Sitharaman said in a written reply to a question in the Lok Sabha on Monday.
The minister, in her reply to a question on money deposited in Swiss banks, while citing recent media reports that funds of Indians in Swiss banks rose in 2021 as compared to 2020, said that “the media reports have not taken account of the way the figures have to be interpreted, which has resulted in misleading headlines and analyses”.
Further, “these media reports have also mentioned that these deposits do not indicate the quantum of the alleged black money held by Indians in Switzerland,” she said.
“The figures published by the Swiss National Bank (SNB) are regularly mentioned in the Indian media as a reliable indicator of the amount of assets held with Swiss financial institutions in respect of Indian residents… The media reports have not taken account of the way the figures have to be interpreted, which has resulted in misleading headlines and analyses,” Sitharaman said.
She said that the Swiss authorities have conveyed that the SNB annual banking statistics should not be used for analysing deposits held in Switzerland by Indian residents. Instead, locational banking statistics — which the SNB collects in collaboration with the Bank for International Settlements (BIS) – should be used.
As per the same media reports, Sitharaman said, the locational banking statistics of BIS have shown a decline of 8.3 per cent during 2021 in deposits by Indian individuals in Swiss banks.
Steps taken by the govt
She said that the government had taken a number of “concrete and pro-active steps” to bring to tax the undisclosed foreign assets and income in the recent past. These include enacting the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, which prescribes stringent penal consequences. For effective implementation of the Act, 29 Foreign Assets Investigation Units have been set up under the Directors General of Income Tax (Investigation) all across India, the minister informed the House.
The government has also entered into Double Taxation Avoidance Agreements/Tax Information Exchange Agreements /Multilateral Convention on Mutual Administrative Assistance in Tax Matters/SAARC Multilateral Agreement with various jurisdictions which facilitate exchange of information. India, she said, has been proactively engaging with foreign jurisdictions for exchange of information under such tax treaties.
A Multi-Agency Group (MAG), consisting of representatives from various enforcement agencies and organisations, has also been set up by the government for expeditious and coordinated investigation of various categories of foreign asset cases like Panama paper leaks, Paradise paper leaks and the recent Pandora paper leaks.
The minister informed that India is engaging proactively with Switzerland to obtain information in relevant cases under the Double Taxation Avoidance Agreement between the two countries.
Sitharaman said that as a result of various steps taken by the government, as of May 31, 2022, on account of deposits made in unreported foreign bank accounts in HSBC cases, undisclosed income of more than Rs 8,468 crore had been brought to tax and penalty of more than Rs 1,294 crore levied.
Also, assessments under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 have been in completed in 368 cases, raising tax demand of over Rs 14,820 crore as of May 31, 2022.