Lok Sabha Question No. 108 (STARRED), answered on 2022-07-25
Subject: Money deposited in Swiss Banks
Ministry: FINANCE
Asked by: Deepak Baij, Balubhau (Alias Suresh Narayan) Dhanorkar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE LOK SABHA

STARRED QUESTION NO. †*108

TO BE ANSWERED ON MONDAY, 25 TH  JULY, 2022

SRAVANA 3, 1944(SAKA)

## MONEY DEPOSITED IN SWISS BANKS

†*108      SHRI DEEPAK BAIJ: SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR:

Will the Minister of FINANCE be pleased to state: (a) whether there has been a steep rise in the amount of money deposited by Indian citizens and companies in Swiss banks; (b) if so, the details thereof and the reasons therefor; (c) the steps taken by the Government to bring back the money deposited in foreign banks during the last five years, year-wise; and (d)  the  amount  of  money  brought  back  by  the  Government  from  foreign  banks  to  the country during the said period, year-wise?

ANSWER FINANCE MINISTER (SHRIMATI NIRMALA SITHARAMAN)

- (a) to (d): A statement is laid on the Table of the House.

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## STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION NO. †*108, RAISED BY SHRI DEEPAK BAIJ, SHRI BALUBHAU ALIAS SURESH NARAYAN  DHANORKAR,  HON'BLE  MEMBERs  OF  PARLIAMENT,  FOR REPLY ON 25 TH  JULY, 2022

(a) and (b): There is no official estimate of amount of money deposited by Indian citizens and companies in Swiss banks.

However, certain recent media reports have stated that funds of Indians in Swiss Banks have risen  in  2021  as  compared  to  2020.  These  media  reports  have  also  mentioned  that  these deposits  do  not  indicate  the  quantum  of  the  alleged  black  money  held  by  Indians  in Switzerland.

In  this  regard,  it  has  already  been  clarified  by  the  Swiss  Authorities  that 'The  figures published by the Swiss National Bank (SNB) are regularly mentioned in the Indian media as a reliable indicator of the amount of assets held with Swiss financial institutions in respect of Indian residents. More often than not, the media reports have not taken account of the way  the  figures  have  to  be  interpreted,  which  has  resulted  in  misleading  headlines  and analyses.  Moreover,  it  is  frequently  assumed  that  any  assets  held  by  Indian  residents  in Switzerland are undeclared (so-called 'Black Money').'

Further,  the  Swiss  authorities  had  also conveyed  that  the  SNB  annual  banking  statistics should not be used for analyzing deposits held in Switzerland by residents of India.  Further, they have said that to analyze Indian residents' deposits held in Switzerland, another data source  should  be  used,  which  is  called  ' locational  banking  statistics ',  which  the  SNB collects in collaboration with the Bank for International Settlements (BIS).

As  per  the same  media  reports,  the 'locational banking  statistics' of the  Bank  for International Settlement (BIS), showed a decline of 8.3 per cent during 2021 in deposits by Indian individuals in Swiss banks.

(c) A number of concrete and pro-active steps have been taken by the Government to bring to tax the undisclosed foreign assets and income in recent past. The details of steps taken, are, inter alia, as under:

- (i) The Government enacted a comprehensive and a 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.  Apart  from  prescribing  stringent  penal consequences, 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).
- (ii) For effective implementation of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, and efficient handling of the cases under this Act,  29  Foreign  Assets  Investigation  Units  have  been  set  up  under  the  Directors General of Income Tax (Investigation) all across India.
- (iii) The  Government  constituted  the  Special  Investigation  Team  (SIT)  on  Black  Money under Chairmanship and Vice-Chairmanship of two former Judges of Hon'ble Supreme Court  in  2014.  The  meetings  of  the  SIT  are  held  regularly  during  which  SIT  is appraised  of  various  actions  against  black  money  by  various  Government  Agencies, particularly the cases involving undisclosed foreign assets and income.
- (iv) The Government of  India has entered into Double Taxation Avoidance  Agreements /Tax Information Exchange Agreements /Multilateral Convention on Mutual

Administrative  Assistance  in  Tax  Matters/SAARC  Multilateral  Agreement  ('tax treaties')  with  various  jurisdictions  which  provide  for  mechanism  of  exchange  of information,  which  is  foreseeably  relevant  for  administration  and  enforcement  of domestic  laws  concerning  taxes.  India  has  been  proactively  engaging  with  foreign jurisdictions, for exchange of information under such tax treaties. Wherever required the Agreements/ Treaties are revised or updated.

- (v) A Multi-Agency Group (MAG), consisting of representatives from various enforcement Agencies/  Organizations,  has  been  set  up  by  the  Government  for  expeditious  & coordinated investigation of various categories of foreign asset cases like Panama paper leaks, Paradise paper leaks and the recent Pandora paper leaks.
- (vi) Further, India has also implemented Automatic Exchange of Information (AEOI) based on the Common Reporting Standard (CRS) and receives, from 2017 onwards, financial account  information  of  Indian  residents  in  other  jurisdictions  with  which  the  AEOI relationship is activated. India has also entered into an Inter-Governmental Agreement (IGA)  with  USA  in  2015  for  sharing  of  financial  account  information  on  automatic basis
- (vii) Effective  enforcement  actions  are  taken  by  the  Government  including  expeditious investigation in foreign assets cases. Such actions include searches, surveys, enquiries, assessment of income, levy of taxes, penalties, etc. and filing of prosecution complaints in criminal courts, wherever applicable,
- (viii) In  context  of  Switzerland,  India  is  engaging  proactively  with  Switzerland  to  obtain information  in  relevant  cases  under  the  Double  Taxation  Avoidance  Agreement between India and Switzerland. Further, India and Switzerland are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and both countries have also signed the Multilateral Competent Authority Agreement pursuant to which, Automatic Exchange of Information is activated between the two countries for  sharing  of  financial  account  information  under  Common  Reporting  Standard (CRS) annually.
- (d) Various steps taken by the Government as above, have resulted in promising outcome, which inter-alia, includes the following:
-  As on 31.05.2022, on account of deposits made in unreported foreign bank accounts in HSBC cases, so far, undisclosed income of more than Rs. 8468 crores have been brought to tax and penalty of more than Rs. 1294 crores levied.
-  648 disclosures involving undisclosed foreign assets worth Rs. 4164 crores were made in the one-time three months compliance window, which closed on 30th September 2015, under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The amount collected by way of tax and penalty in such cases was about Rs. 2476 crore.
-  As on 31.05.2022,  assessments  under  the  Black  Money  (Undisclosed  Foreign  Income and Assets) and Imposition of Tax Act, 2015 have been completed in 368 cases, raising tax demand of over Rs. 14,820 crores.

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