As the famed secrecy walls of Swiss banks started to crumble, some Indians felt a chill down their spine. Delhi has begun receiving information on its residents' account details in Swiss banks.
That tranche of data opens a pandora's box that India's tax authorities are keen to explore as they launch a renewed effort against tax evasion.
The data could help establish prosecution cases against those who had any unaccounted wealth in those accounts, as it provides entire details of deposits and transfers as well as earnings, including those made through investments in securities and other asset classes.
While details of more than 100 Indians nationals have been shared in the past year by the Swiss government with the Indian authorities, it is likely that a large majority of the cases currently under scrutiny would result in the sharing of information with India."
"This will be a significant step in the government's fight against black money as the era of Swiss bank secrecy will finally be over," India's income tax department said.
When the Modi government first came to power in 2014, it had promised to launch a crackdown on dirty money and tax evasion, as part of a national campaign to tighten the noose on individuals suspected of having amassed illicit wealth.
The exchange takes place within the framework of the global standard on the automatic exchange of information (AEOI). India is among 75 countries with which Switzerland's Federal Tax Administration (FTA) has shared intelligence on the financial details of people.
The first tranche of data was shared last year. A spokesperson of the Federal Tax Administration has confirmed that the next exchange will take place September 2020. "According to the international agreement in place, the exchanges have to take place within nine months after the end of the respective calendar year," the spokesperson said. "This means the exchange takes place in September, except for corrections."
The exchanged information includes identification, account and financial details. These refer to name, address, state of residence and tax identification number, as well as information concerning the financial institution, account balance and capital income.
Several bankers and regulatory officials have told local media that the details being shared relate mostly to businessmen, including non-resident Indians now settled in several South-East Asian countries as well as in the US, the UK and even some African and South American countries.
Bankers also admitted there has been an increased outflow from these accounts after a global crackdown began against the so-called high-secrecy walls associated with the Swiss banks. In the meantime, several of these accounts have been closed.
India's tax authorities are also going through the ‘residential' status of non-resident Indians (NRIs) as it targets undisclosed overseas assets.
Delhi probes NRIs with a fine-tooth comb
Several individuals who are suspected to have moved abroad after evading taxes in India are also being probed and their banking details are in the process of being shared by the Swiss authorities with their Indian counterparts.
These notices have been issued after India's request for "administrative assistance" in respective probes into particular cases and are different from the automatic exchange of information framework.
According to the notices published in the Switzerland's federal gazette, these individuals, as well as trusts based in the Cayman Islands, and companies have been asked to appoint their nominees in case they want to appeal against have their bank details shared with India.
Those named in these notices so far include businessman Atul Punj, Gautam Khaitan, Satish Kalra, Vinod Kumar Khanna, Dullabhbhai Kunverji Vaghela, Revaben Dullabhai Kunverji Vaghela and Balwantkumar Dullababhai Vaghela.
The Cayman Islands-based trusts named in such notices include The P Devi Children's Trust, The P Devi Trust, The Dinod Trust and The Agarwal Family Trust.
Similar notices have also been issued in the names of Cayman-based Devi Limited and India-based Aadhi Enterprises Pvt Limited, among others.
While details of more than 100 Indians nationals have been shared in the past year by the Swiss government with the Indian authorities, it is likely that a large majority of the cases currently under scrutiny would result in the sharing of information with India.
Some of these notices are already bound for Delhi after the preliminary appeals by the concerned clients of Swiss banks were rejected due to inadequate supporting facts and documents, leaving little chance of their further pleas getting heard.
While Swiss bank accounts have long been a matter of heated political debate in India due to suspicion that they were being used to hide money, this is the first time that India's authorities got to see behind the looking glass. For those who felt a chill down their spine, it could be that it's time to accept the changes: Switzerland will no longer hide their secrets or dirty money.
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