Not all swiss bank assets are black money, says Union FM

By Our Special Correspondent

Union Finance Minister Nirmala Sitharaman said in a written reply to a question in the Lok Sabha on Monday that there is no official assessment of money deposited by Indian citizens and companies in Swiss banks.

Citing recent media reports that Indian funds in Swiss banks have increased in 2021 compared to 2020, the minister replied to a question on money deposited in Swiss banks, saying, “The media reports do not take this trend into account. Statistics should be interpreted, resulting in misleading headlines and analyses”.

“Statistics published by the Swiss National Bank (SNB) are regularly cited in the Indian media as a reliable indicator of the amount of assets held by Swiss financial institutions in relation to Indian residents… Media reports do not take this approach into account. Statistics need to be interpreted, which has resulted in misleading headlines and analyses,” said Sitharaman.

She said the Swiss authorities had informed the SNB that annual banking statistics should not be used to analyze deposits held by Indian residents in Switzerland. Instead, location banking statistics collected by the SNB in ​​cooperation with the Bank for International Settlements (BIS) should be used.

According to the same media reports, BIS's locational banking statistics showed an 8.3 per cent decline in deposits of Indian individuals in Swiss banks in 2021, Sitharaman said.

She said the government has taken several "consistent and proactive steps" to tax undisclosed foreign assets and income in recent times. These include the imposition of the Tax Act, 2015, which prescribes black money (undisclosed foreign income and assets) and strict penal consequences.

For effective implementation of the Act, 29 Foreign Assets Investigation Units have been set up across India under the Director General of Income Tax (Investigation), the Minister told the House.

The government has also entered into SAARC Multilateral Agreement with various jurisdictions to facilitate the avoidance of Double Taxation Agreements/Tax Information Exchange Agreements/Multilateral Convention on Mutual Administrative Assistance in Tax Matters/Exchange of Information.

As a result of various measures taken by the government, as on May 31, 2022, on account of deposits made in unreported foreign bank accounts in HSBC cases, Rs. Sitharaman said that over Rs 8,468 crore of undisclosed income was brought to tax and penalty. It collected more than 1,294 crores.

Also, by May 31, 2022, Rs. Assessments under the Black Money (Undisclosed Foreign Income and Assets) and Taxation Act, 2015 have been completed in 368 cases raising the tax demand to over Rs 14,820 crore.