The Indian government’s bid to unearth black money stashed away in hidden offshore accounts is starting to pay off.
The government believes around £350 billion is hidden in undeclared bank accounts and investments outside the country and wants to bring the tax owed on the money back to India.
Nine countries have already joined the hunt for the cash by providing financial information about Indian taxpayers.
The Indian tax authorities have received information about 25,000 accounts already from New Zealand, Britain, Spain, Sweden, Denmark, Finland, Portugal, Japan and Slovenia.
Other countries are also supplying data, but on a lesser scale. They include Australia, Mexico, Italy and Trinidad and Tobago.
FATCA bonanza
The biggest tax bonanza is expected under a reciprocal tax information exchange under the US Foreign Account Tax Compliance Act (FATCA).
Under FATCA, India will tell the US Internal Revenue Service (IRS) about Americans with money in India, while the IRS will reciprocate with financial data about Indians with bank accounts and investments in the US.
The government has already set up a special task force with the job of tracking down suspected hidden offshore cash.
India’s Central Board of Direct Taxes (CBDT) is collecting the data under the terms of double taxation treaties and tax information exchange agreements with other countries.
India has set up a special investigation team to track the information and find the owners of the money.
India has also signed up to the Organisation of Economic Cooperation and Development (OECD) tax information exchange network, which includes 34 other countries.
Black money
“We are receiving huge amounts of data and this is set to explode when FATCA and the OECD tax networks start working to full capacity within the next two years,” said a CBDT spokesman.
“We know that this black money is out there and we are determined to track down who owns it and make sure they pay the right amount of tax.”
Millions of Indians – termed the diaspora – work as expats before returning home, and many leave much of their earnings offshore to avoid paying tax at home.
Many millions more wealthy Indians are suspected of moving their assets out of the country to avoid the tax man.
New Zealand has provided much of the data. Although not a tax haven, until recently New Zealand allowed non-residents to set up shell companies, which many Indians took advantage of to hold their financial assets away from the prying eyes of the tax authorities.
What a frickin joke and what a stupid frickin moron Jim Atkins is for relaying the false information in this article…. NOTE: HELL WILL FREEZE OVER BEFORE THE UNITED STATES PROVIDES RECIPROCITY OF THE SAME KIND IT RECEIVED UNDER FATCA. Foreign officials are making note of this reciprocity for cowardly rolling over to FATCA but all will get cornholed when the time comes for the US to hand over info. It’s the great scam being perpetrated by the US Treasury and surprising how many governments are falling for this side talk. There really is no chance Congress will allow any law that releases private information of this nature. Especially now with a Republican majority likely to be elected in both chambers. The fact that reciprocity is still being considered to happen is so laughable, it is very both astonishing and a bit amusing high government officials who hopefully have a few nuerons working actually fall for such promise. Let’s hope this same officials have some self respecting balls and confront the US when it is clear to all no reciprocity will be provided .