Keep foreign black money info secret, CBDT tells I-T
4 Jun 2015 11:45 PM GMT
“In many countries, governments have given commitments to their citizens... that information will not be provided under the tax treaty if the recipient country has not complied with its obligations under the agreement to protect the confidentiality of information and using the information solely for collecting and enforcing taxes covered by the agreement.
“Further, in many countries... governments have recognised that the offshore financial centres have agreed to exchange information under tax treaties only if the information is treated as confidential and used for the purposes specified in the agreement through which it is exchanged. Any breach of these requirements may provide an excuse to them (foreign nations) not to provide information in future,” CBDT told its officials in the latest instructions issued vis-a-vis cases of illegal funds stashed abroad.
The CBDT is the apex policy making <g data-gr-id="29">body</g> of the Income Tax department. The instructions, accessed by PTI, added that “it is, therefore, essential that for continued assistance by our treaty partners, the information received should be kept confidential and should be used and disclosed as per the terms of agreement. “The officers of the tax department should ensure that no inappropriate disclosure is made either intentionally or by accident or carelessness,” it said.
There have been many instances in the past of the government citing these treaty riders while refusing to disclose the names of such individuals before their cases reached the prosecution stage. The names of at least seven “Indian nationals” holding Swiss bank accounts were recently made public in Switzerland’s Federal Gazette with regard to details sought about them by the Indian
authorities.
‘Tax benefits spur investment to India via Mauritius’
Tax treaty benefits are prompting investors to route their investments from Mauritius into India, WTO has said. Between 2010-11 and 2013-14, Mauritius was the largest source of FDI, followed by Singapore, except in 2013-14. “It would appear that part of these large flows may result from the advantages of the tax treaty between Mauritius and India, which may make it attractive for investors to route their investment through Mauritius to take advantage of the preferential provisions, which include exemption from capital gains tax,” according to a report prepared for the sixth Trade Policy <g data-gr-id="76">Revie w</g> of India, by the WTO. As per the Department of Industrial Policy and Promotion (DIPP), India had received $9.49 billion in 2012-13 and $4.85 bn in 2013-14. In 2013-14, India attracted $5.98 bn foreign direct investment from Singapore. It said that FDI inflows have been strong in services including financial, banking, insurance, business,outsourcing, R&D, courier, and technical services, and the automobile industry and telecommunications.
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