Fall in Swiss bank funds may be due to black money drive: Government

Several measures have been taken to combat black money both by way of policy level initiatives as well as through more effective enforcement action.

The fall in deposits by Indians in Swiss banks may be a result of the steps being taken by the government to unearth black money stashed abroad, the Finance Ministry said on Tuesday.

“The reported fall in deposits by Indians in Swiss banks could be due to several reasons including steps taken by Government to unearth black money stashed abroad,” Minister of State for Finance Jayant Sinha said in a written reply in the Rajya Sabha.

He was replying to a question on reported fall of over 10% in deposits by Indians in Swiss banks in 2014 as compared to 2013, even as overall foreign deposits rose to 1.5 trillion Swiss franc.

Sinha further said that the government has taken “effective steps” to tackle the issue of black money, including putting in place a robust legislative and administrative frameworks.

Besides, several measures have been taken to combat black money both by way of policy level initiatives as well as through more effective enforcement action.

The policy initiatives include putting in place a foreign black money law, setting up of a Special Investigation Team (SIT) under retired Supreme Court judge, besides introducing in a Benami law to deal with domestic unaccounted wealth.

Besides, for proactive sharing of financial information, India has entered into a multilateral regime for Automatic Exchange of Information (AEOI) and also signed Foreign Account Tax Compliance (FATCA) with the United States.

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, provides for a tax and penalty of 60% if the foreign assets are disclosed within the compliance window which ends on September 30. The tax and penalty is to be paid by December 31.

After the expiry of window, such persons have to pay tax and penalty of 120% on the undisclosed income or assets held abroad, besides up to 10 year jail term.