To trace the secret bank accounts of Indians abroad, the finance ministry is considering reopening accounts of such individuals for the past 16 years, against the present norm of only six years.
“We may inspect past records. The number of years may be extended from six years to 16 years,” said a ministry official. This might, he said, help in seeking information from tax havens on such individuals, as the government would be in a condition to have more relevant details. Currently, the ministry can seek information from tax payers on unexplained investment under Section 69 of the Income Tax Act. Likewise, it can seek details on unexplained expenditure under Section 69C of the Act. The assessing officer has the power to reopen a case up to six years from the end of the relevant assessment year.
India has been revising its tax treaties with many tax havens to crack down on evaders. However, the revised agreements, including a recent one with Switzerland, allow India to access information from these countries only from prospective effect. India and Switzerland will start exchanging information on tax matters from the next financial year after the new treaty is ratified by the Swiss parliament tomorrow, paving way for obtaining data on unaccounted money stashed there.
Last month, a government panel had ruled out any Voluntary Disclosure of Income Scheme, creation of a new Act and capital punishment as measures to deal with the issue of black money abroad. The committee suggested only strengthening of the administrative machinery and better sharing of intelligence.
The government has adopted a five-pronged strategy on unaccounted money. It includes creating an appropriate legislative framework, joining the global crusade against black money, setting up institutions for dealing with illicit funds, developing a system for implementation, and imparting skills to its staffers for effective action. It has entered into pacts with three economic think tanks — National Institute of Public Finance and Policy, National Council of Applied Economic Research and National Institute of Financial Management — to arrive at an official figure on the extent of the problem.
