Singapore to Virgin Islands: India begins global black money crackdown

India has approached over half a dozen foreign jurisdictions, including Singapore and some tax havens, for banking and other financial details of more than 500 individuals and entities that might have ‘secret offshore accounts’ at those places.

The “names and listed addresses” of as many as 505 India-linked entities, including businessmen and companies from the country, have been made public after a global expose on secret offshore accounts by US-based rights group, the International Consortium of Investigative Journalists (ICIJ). The addresses of Indian entities and individuals, according to the ICIJ expose, have addresses of upmarket localities of account holders from Delhi, Mumbai, Bangalore, Kolkata, Chennai, Hyderabad, Pune, Ahmedabad, Baroda, Surat, Chandigarh and many other Indian cities and few other moffusil locations.

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Sources here said that the Foreign Tax and Tax Research (FT&TR) division in the Finance Ministry has approached the British Virgin Islands, Cayman Islands and Singapore under the tax information exchange treaties with these jurisdiction for banking and other details of those named by ICIJ. Besides, FT&TR has approached Cooks Islands and Samoa through other diplomatic channels, sources said, adding that a few other countries have also been approached for details of entities alleged to have secret accounts at those places.

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“Preliminary inputs obtained in this regard do not present a clear picture and hence details have been sought through official protocol mechanisms and existing treaties,” a senior Finance Ministry official said.

The ICIJ claims to have found over “one lakh secret companies, trusts and funds created in offshore locales” by entities from across the world in the past three decades. While the broader details of this global expose were announced by ICIJ in April, the names and addresses of the individuals and entities were made public yesterday.

The ICIJ has, however, put a disclaimer that there might be a legitimate use for offshore companies and trusts and being on the list does not necessarily mean that the said entities have broken any laws.

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Sources said that the Indian authorities would also take a call on further action after they get necessary details from the concerned countries and find any wrongdoings on the part of the individuals and entities named by ICIJ.

“The information has been sought under the provisions of the Double Taxation Avoidance Agreement and Tax Information Exchange Agreement (TIEA) from the countries where we have such arrangements. Some other countries are being approached through the mutual tax assistance protocol of the OECD,” sources said. The Organisation for Economic Cooperation and Development (OECD) is a Paris-based body spearheading combat against black money and tax crimes by partnering powerful economies and nations with low tax regimes, popularly called tax havens.

“The effort is to see if these names are legitimate and if they are, it will be checked if that information is with the Income Tax department. Rest all other unreported entities in this list will be liable to action under Indian tax laws,” the sources said.

After ICIJ’s initial expose in April, Finance Minister P Chidambaram had said that an inquiry has been initiatedagainst the individuals who have been named in this global report for having stashed money in secret offshore accounts.

The expose claims to have unearthed details of 2.5 lakh individuals and entities from more than 170 countries,including India, that evaded taxes by setting up companies in tax havens.

The body has, however, said that the featuring of these names necessarily does not mean that the entities havecommitted tax crimes. “There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any persons, companies or other entities included in the ICIJ Offshore leaks database have broken the law or otherwise acted improperly,” the ICIJ said in its disclaimer posted on the portal.

PTI