Govt scanner on black money stashed in Singapore banks
Those hiding unaccounted income in banks in Singapore will come under the scanner of the Indian authorities, with New Delhi soon getting information of all accounts opened in the country by Indians since 2008.
The Singapore revenue authority has asked all banks to share details of Indian account holders to pass them on to New Delhi under a double taxation-avoidance agreement (DTAA). As part of the information-exchange drive to curb back money stashed overseas, many Indians with bank accounts in Singapore have received letters about this.
“This is just the beginning. We will have an entire database of information of all current and past account holders in Singapore, and track the trail of money and its movement. Information from other countries is also being shared with us,” said a senior government official.
Information shared by Singapore with the Indian authorities is not only about account holders, but also beneficiaries.
“We are asking for information about specific assessees, based on information we received from our sources.
A lot of information exchange is happening. We are also providing information to our treaty partner countries,” said a senior tax official.
Information about closed accounts will also be made available to the Indian government. “Even if you have closed the account in Singapore and transferred the money to a tax haven, we will get the information under the exchange drive,” the official added.
India and Singapore had in 2013 amended the DTAA to help exchange banking and tax-related information more effectively.
Information-exchange pacts with other countries will make it more difficult to stash black money in overseas accounts. India is already receiving information from the US under the Indo-US Foreign Account Tax Compliance Act (FATCA), which came into effect in 2016. It aims to ensure that tax is paid on income generated from wealth abroad. Switzerland has started collecting information of Indian accounts and will start sharing it with the Indian authorities from next year. Although it will provide information prospectively from the time of coming into effect, it may help the tax department detect audit trail for an entity’s past transactions.
A joint declaration for the implementation of Automatic Exchange of Information between India and Switzerland was signed in November 2017; under it, both would start collecting data in accordance with the global standards in 2018 and exchange it from 2019 onwards.
“It is the new order of the day. Information is being exchanged across the globe now,” said Rahul Garg, partner, PwC India.