A special unit has been created by the govt within the countrywide investigation wings of the tax department for focussed probe in cases of undisclosed assets held by Indians abroad and possession of black money in foreign shores, officials said.
The Foreign Asset Investigation Units (FAIUs) are recently created altogether the 14 investigation directorates of the tax department located in various parts of the country that are primarily tasked to undertake raids and seizures, and develop intelligence to see evasion done by various methods.
A total of 69 existing posts within the tax department were diverted by the Central Board of Direct Taxes (CBDT) in November last for the creation of this unit after approval from Union minister of finance Nirmala Sitharaman, a senior officer told PTI.The CBDT frames policy for the tax department.
We are now during a global regime where automatic exchange of tax information is that the norm. More and more countries and jurisdictions are following the international protocols set by the Organisation for Economic Co-operation and Development (OECD) and therefore the Financial Action Task Force (FATF) for tax transparency and combating instances of worldwide concealment , terror financing and evasion , he said.
The new units also will probe cases of Indian entities named in global tax document leaks just like the Panama Papers.The major treaties or automatic tax information exchange protocols through which Indian tax authorities get information include the Double Taxation Avoidance Agreement (DTAA), Tax Information Exchange Agreements (TIEAs) and therefore the refore the most up-to-date Foreign Account Tax Compliance Act (FATCA) between India and the US.
FATCA covers automatic sharing of data on bank accounts also as financial products like equities, mutual funds and insurance, and is aimed toward fighting the menace of black money stashed abroad.Banks, mutual funds, insurance, pension and stock-broking firms will report their Indian client details to the US which can be shared with New Delhi . Similarly, Indian entities will do a reciprocal information sharing about Americans.The FAIUs are going to be under the authority of the jurisdictional director general of tax (investigation) rank officer and its work are going to be directly monitored by the CBDT, the officials said.
The tax Return (ITR) forms even have a separate column seeking details of foreign assets of a private or entity and these get obviously matched with the knowledge obtained through automatic exchange from global counterparts. Any mismatch requires dedicated investigation and therefore the new wing can alright do this job, they added.