Too Bad They Can’t Target The Corrupt Political Leaders Of India!
MUMBAI – Tax authorities will intensify their efforts to crack down on unaccounted-for money stashed overseas by seeking information from their counterparts in other countries.
Too bad they can’t target the corrupt political leaders of India! A recent letter issued by the Chairperson, Central Board of Direct Taxes (CBDT) bears testimony to this intention.
To ensure that Indian tax authorities have access to information from other countries and can thus tackle the menace of black money and tax avoidance, several measures have been taken during the past few years. The government of India has renegotiated several tax treaties to enable exchange of information – such as the tax treaty with Switzerland. It has entered into many Tax Information Exchange Agreements (TIEAs) with tax havens (with whom India does not have tax treaties) like Cayman Islands, Bermuda, British Virgin Islands for enabling exchange of information. Domestic tax provisions have been tightened. The Finance Act, 2012 extended the time limit for reopening cases to sixteen years where income relates to an asset located outside India. Details of foreign bank accounts, immovable properties and assets outside India are also required to be filed by tax payers.
The CBDT chief’s letter points out that such regulatory effort will come to naught if tax officers do not make use of the opportunities for obtaining cross-border information. In January, the CBDT had issued an internal manual – ‘The Manual on Exchange of Information for tax purposes with foreign jurisdictions’ which provided guidelines on how to obtain information from authorities of other countries under tax treaties, TIEAs and multinational conventions.
“In many cases in making the references, requests are not being properly framed and only some generalised statements are made. This results in a situation where even if the foreign tax authorities intend to provide assistance to us, they’re not able to do so,” states the CBDT chief’s letter. Commissioners and directors of income tax have been asked to personally monitor cases where information has been sought from overseas.
