Ministry of Finance response to Panama Papers leak

In the past also based on the investigative journalism of ICIJ in 2013 in which the links of 700 Indian persons were shown to have business connection with off-shore entities, the Revenue Department, Ministry of Finance, Government of India has been able to identify 434 persons out of them as Indian residents. 184 persons out of these have also admitted their relationship with such off-shore entities/transactions. Although, in the previous report of ICIJ, information relating to the financial transactions/bank accounts was not available, the Government authorities have detected credit in the undisclosed foreign accounts of such Indian persons in excess of Rs.2,000 crores. 52 prosecution complaints under the provision of Income-Tax Act have been filed against offenders so far.

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Similarly, in response to information received in 2011 from Government of France, relating to the bank accounts of 628 Indian persons in HSBC, Switzerland, a lot of progress has been made in the investigation by the Department. Out of the list, 569 persons have been traced. However, in the information received, details of HSBC amount were shown against 339 persons only. Out of 628, 214 were found not actionable on account of no balance or being non-residents or being non-traceable. Out of the remaining cases, assessments have been completed in 390 cases in which undisclosed income of Rs.5018 crore and tax demand of Rs.4584 crore has been raised. Also the concealment penalty of Rs.1213 crores has been levied in 157 cases. Also 154 prosecution complaints have been filed in HSBC cases. Based on the prosecution complaints of predicate offences, ED has also initiated investigation in 23 cases of HSBC and 20 cases of ICIJ expose of 2013.

The Government is committed to detecting and preventing generation of black money. In this context, the expose of Panama Papers will further help the Government in meeting this objective. As per the directions of Hon’ble Prime Minister given today, a special multi-agency group is being constituted today consisting of officers from Investigative Unit of CBDT, FIU and FT & TR division and representative of RBI. The group will monitor the flow of information in each one of the case. The Government will take all necessary actions as required to get maximum information from all sources including from foreign governments to help in the investigation process.

India is also concerned that there are countries in the world which are being used as tax havens because of which all other countries of the world suffer loss of tax. The recent initiative of Base Erosion and Profit Shifting (BEPS) will help India and other countries in checking this practice of tax-avoidance through such tax havens. India is also fully committed to the BEPS initiative.