Lok Sabha Question No. 535 (UNSTARRED), answered on 2018-07-20
Subject: Black Money
Ministry: FINANCE
Asked by: ASADUDDIN OWAISI, Shrirang Appa Barne, GOPALAKRISHNAN CHINNARAJ, NAGARAJAN P., SHIVAJI ADHALRAO PATIL, ELUMALAI VELLAIGOUNDER, SUSHIL KUMAR SINGH, R. GOPALAKRISHNAN, ANANDRAO  ADSUL, Tejpratap Singh,Yadav, BALASUBRAMANIAM SENGUTTUVAN, SHRIKANT EKNATH SHINDE, ANJU BALA, VINAYAK BHAURAO RAUT, DHARMENDRA YADAV

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

LOK SABHA UNSTARRED QUESTION NO. 535 TO BE ANSWERED ON FRIDAY, 20 TH  JULY, 2018

ASHADHA 29, 1940 ( SAKA )

## BLACK MONEY

535: SHRI ASADUDDIN OWAISI: SHRI SHRIRANG APPA BARNE: DR. C. GOPALAKRISHNAN: SHRI P. NAGARAJAN: SHRI ADHALRAO PATIL SHIVAJIRAO: SHRI V. ELUMALAI: SHRI SUSHIL KUMAR SINGH: SHRI R. GOPALAKRISHNAN: SHRI ANANDRAO ADSUL: SHRI TEJ PRATAP SINGH YADAV: SHRI B. SENGUTTUVAN: DR. SHRIKANT EKNATH SHINDE: SHRIMATI ANJU BALA: SHRI VINAYAK BHAURAO RAUT: SHRI DHARMENDRA YADAV:

## Will the Minister of FINANCE be pleased to state:

(a) whether Indian money in Swiss banks fallen by 45 per cent in 2016 and if so, the details thereof; (b) whether the money parked by Indians in Swiss banks has rose over 50 per cent during 2017 as compared to previous years and India has moved upto 73rd place in terms of money stashed abroad and if so, the details thereof along with the reaction of the Government thereto; (c)  the  reasons  found  by  the  Government  for  rising  trend  of  deposits  in  Swiss  bank's  especially demonetisation and whether it is on the rise, in spite of Government's efforts to curb black money, if so, the details thereof; (d) whether the Government has any agreement with the Swiss banks to share the details of depositors and if so, the details thereof; (e)  whether the Government has taken any action to reveal the names of those depositors in the previous years especially in 2017, if so, the details thereof and if not, the reasons therefor; (f) whether the Government has taken cognizance that in comparison, the total funds held by all foreign clients of Swiss banks rose only about 3 per cent to 1.46 trillion Swiss franc and if so, the reaction of the Government thereto and the other corrective measures taken by the Government

- against black money hoarders and in bringing back black money stashed abroad; and (g) whether it is true that not all Swiss bank money illegal and if so, the details thereof?

## ANSWER MINISTER OF STATE FOR FINANCE (SHRI SHIV PRATAP SHUKLA)

(a) & (b):    No such information is available with the Government. However, as per recent media reports, the deposits of Indians in Swiss bank, in the last three years are as under:

|   Year |   Deposits by Indians in Swiss Bank in CHF billion |
|--------|----------------------------------------------------|
|   2015 |                                               1.22 |
|   2016 |                                               0.68 |
|   2017 |                                               1.02 |

(c)    The increase was mainly due to capital increase for a subsidiary of a Swiss company in India, increase  in  liabilities  connected  with  outstanding  derivative  financial  instruments      and  increase  in customer deposits (consolidated at level of parent company taking into account the deposits of the branches or subsidiaries) which are linked to companies and not individuals.

(d)      India and Switzerland have in place a Double Taxation Avoidance Agreement (DTAA), which entered into force on 29 th December, 1994.  Protocol amending the agreement came into force on 07 th October, 2011.  Based on the provisions of DTAA, the two countries exchange information on a request basis,  which  is  foreseeably  relevant  to  the  administration  or  enforcement  of  the  domestic  laws concerning taxes covered by the agreement, which may also include details of depositors.

India  and  Switzerland  are  signatories  to  the  Multilateral  Convention  on  Mutual  Administrative Assistance  in  Tax  Matters  (MAC)  and  both  countries  have  also  signed  the  Multilateral  Competent Authority Agreement (MCAA) pursuant to which the Automatic Exchange of Information (AEOI) is activated  between  the  two  countries  for  sharing  of  financial  account  information  effective  from 01.01.2018 with first transmission in 2019.  Accordingly, India will receive the information of financial accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis.

(e)  The disclosure of the information received under tax treaties is governed by the confidentiality provisions of the tax treaties. Further, the disclosure of information of foreign assets of resident tax payers collected as per 'Schedule FA' of the Return of Income is protected as per the provisions of Section 138 of the Income-tax Act, 1961.

(f) The Government has taken several corrective measures against black money hoarders and in bringing back  black  money  stashed  abroad  which,  inter  alia,  includes  putting  in  place  the  necessary  legal arrangements for  obtaining  information  about  financial  accounts  of  Indian  residents  in  Switzerland annually on an automatic basis.  These exchanges with Switzerland will take place from 2019 for the financial account information pertaining to the year 2018 and onwards.

Apart from the above, the Government has taken measures like:

Constitution  of  the  Special  Investigation  Team  (SIT)  on  Black  Money  in  May,  2014  under  the Chairmanship and Vice-Chairmanship of two former Judges of Hon'ble Supreme Court. Investigation into cases involving substantial black money/undisclosed income, particularly black money stashed abroad, is being extensively and intensively monitored by the SIT.

The Government enacted a comprehensive and a more stringent new law, namely, the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 that has come into force w.e.f. 01.07.2015. Inter alia , for the first time, this law has included the offence of willful attempt to evade  tax  etc.  in  relation  to  undisclosed  foreign  income/assets  as  a  Scheduled  Offence  under  the Prevention of Money-laundering Act, 2002 (PMLA).

(g) All the Swiss bank money may not be illegal. The reasons for the same, may inter alia , include:

- i)  remittances  through  banking  channel  under  the  Liberalized  Remittance  Scheme  (LRS)  for  the purposes approved by the Reserve Bank of India;
2. ii) remittances which may be from a country outside India to a Swiss Bank account;

iii) customer deposits consolidated at the level of the parent company taking into account the deposits of the branches or subsidiaries.

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