New Delhi/Berne: India has received the first tranche of details about financial accounts of its citizens in Swiss banks under a new automatic exchange of information framework between the two countries.
The sharing of the data that was prepared by all Switzerland-based banks under a direction from the Swiss government marks a significant milestone in the fight against black money suspected to be stashed abroad. India figures among 75 countries with which Switzerland's Federal Tax Administration (FTA) has exchanged information on financial accounts within the framework of global standards on AEOI, an FTA spokesperson told news agency PTI.
This is the first time that India has received details from Switzerland under the AEOI framework, which provides for exchange of information on financial accounts that currently active as well as those accounts that were closed during 2018.
Although a large portion of the first tranche of data relates to accounts that have been already closed due to fear of action, it can be quite useful for establishing a strong prosecution case against those who had any unaccounted wealth in those accounts, bankers and regulators have said.
The data provides entire details of the entire flow of funds to and from all the accounts that were active even for a single day in the year 2018, bankers said. So deposits and transfers as well as of all earnings including through investments in securities and other asset classes can be examined.
However, the information exchange is governed by strict confidentiality clauses, and the FTA officials refused to disclose specific details on the number of accounts or about the quantum of financial assets associated with the Indian clients of Swiss banks. Also, The AEOI only relates to accounts that are officially in the name of Indians and they might include those used for business and other genuine purposes.
Overall, the FTA has sent information on around 3.1 million financial accounts to the partner states and received information on around 2.4 million from them.
The exchanged details include identification, account and financial information. These include name, address, state of residence and tax identification number, as well information concerning the financial institution, account balance and capital income.
The next exchange would take place in September 2020, the FTA spokesperson added.
PTI had earlier quoted regulatory officials as saying that the first trance relates mostly to businessmen, including non-resident Indians now settled in several South-East Asian countries as well as in the US, the UK and even some African and South American countries.
They admitted there was a huge outflow from these accounts in the last few years after a global crackdown began against the so-called high-secrecy walls associated with the Swiss banks and several of these accounts got closed.
Besides, there are at least 100 cases of older accounts held by Indians, which might have been closed before 2018, for which Switzerland is in the process of sharing details with India under an earlier framework of mutual administrative assistance as Indian authorities had provided prima facie evidence of tax-related wrongdoings by those account holders.
These relate to people engaged in businesses like auto components, chemicals, textiles, real estate, diamond and jewellery, steel products etc. Regulatory and government officials said the special focus of the analysis of the Swiss bank data could be on identifying people with political links.
A Swiss delegation was in India in August before the first set of details could get shared under the new automatic information exchange, while the two sides also discussed possible steps to expedite execution of tax information sharing requests made by India in specific cases and enhancing of collaboration in offshore tax compliance matters.
The AEOI is being seen as a major boost in India's fight against suspected black money stashed abroad.
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