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Indians in US have to disclose offshore accounts

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  • Milap Choraria
    Indians in US have to disclose offshore accounts Obama administration backs Congress (USA Parliament) tax haven crackdown, whereas, India being a Member of
    Message 1 of 1 , Mar 4, 2009

      Indians in US have to disclose offshore accounts

      Obama administration backs Congress (USA Parliament) tax haven crackdown, whereas, India being a Member of G20, not ready to adopt similar importnat policy, because of Powerful politicains from India, are alleged to have huge Black Money, in Foreign Banks including Swiss Banking System. Resultantly, my constant RTI Applications producing Zero Results, rather Government misusing the Section 24 of RTI Act, 2005. I have been kept updated about recent development in USA by "jaya kamlani" and my Freind from USA Mr. Babulal Banthia:-


      The Obama administration on Tuesday endorsed legislation to crack down on offshore tax havens, raising the stakes in a showdown between the United States and bank-secrecy nations such as Switzerland.

      "It also sends a strong signal to tax havens that this administration is not going to tolerate the kind of offshore tax abuses that have been draining $100 billion a year from the U.S. Treasury," Levin said in a statement.

      He asked Geithner to join other nations "calling for action to be taken at the G20 meeting in April to clamp down on offshore secrecy jurisdictions that impede tax enforcement." The global economic crisis is expected to dominate the meeting of the Group of 20 major developed and emerging economies.

      The U.S. government last month widened its legal assault on tax dodgers with secret offshore accounts by suing Swiss banking giant UBS AG to try to obtain the names of thousands of its rich U.S. clients. Complete News is posted at:


      Whereas, in continue to my efforts against Huge Black Money in Swiss Banking Systems, through my representation dated 11.11.2008, submitted before Her Excellency President of India and others  interalia that:

      "My aforesaid News was high lighted by Times of India , as its Leading News Item, only when the same was hijacked by Transparency International India Chapter, Chairman Mr. Tehliani.  

      I was one who listen speech during CIC Convention in which Dr. Man Mohan Singh argued for balanced approach under Right to Information Act, 2005. I have made several applications to know that what initiatives have been taken by Indian Government to unearth black money in Swiss Banking System or alike systems. But reply shows that Government is not accountable to do ant thing on this issue. This shows that Indian Government contrary to USA , is engaged to protect the huge black money of powerful politicians, bureaucrats, wrong doers and mafias. Whether this was the one of the reason for such arguments by Prime Minister Dr. Man Mohan Singh to take balanced approach under Right to Information Act, 2005?   

      Therefore, I want to know that would Government of India could spell out that what sincere efforts are going to be taken by Indian Government to unearth huge black money deposited in Swiss Banks? This is more important in consideration of the fact that one page Advertisement published last year in the NewYork Times claimed that 2 Billions Dollars are deposited on behalf of one of the Prime Minister of India in Swiss Bank Account.     

      I hope that under Supervision of the Her Excelency President of India and Prime Minister of India some thing positive results must be seen by Indian Public, on this particular issue."  

      That aforesaid detailed representation was transferred by the President to Revenue Department, which finally reaches to Enforcement Directorate. Directorate through a Private Email Provider replied that "The requisite information/documents cannot be provided by the Directorate of Enforcement, as this Directorate has been exempted under Section 24 read with the Second Schedule of the Right to Information Ac, 2005."

      From the aforesaid reply few questions may required to be answered by the Directorate whether Government is not misusing Section 24 of the RTI Act, 2005? which provided in amply clear that "Provided that the information pertaining to the allegations of corruption and human rights violations shall not be excluded under this sub-section" and "Whether any money deposited in Swiss Banks without the knowledge of the Government Authority is not covered within the meaning of the "Corrupt Practice"?, and

      "Whether Government is not engaged to protect the huge black money of big politicians, created through corrupt means and deposited in Swiss Banking System or likewise in Banks of other countries"?

      Indians in US have to disclose offshore accounts

      4 Mar 2009, 1020 hrs IST, Deepshikha Sikarwar, ET Bureau (Economic Times)

      NEW DELHI: For Indian tax authorities, who have so far not mustered courage to ask taxpayers to disclose their bank accounts abroad despite speculation over Indians having huge deposits in Swiss banks, here's something to take a cue from.

      The tax authority in the US has now made disclosure of offshore accounts mandatory even for non-resident individuals or corporates who have significant business in the country. This has ramifications for Indians working or having business interest in the US and also the subsidiaries of Indian companies registered there.

      Apart from bringing individual wealth into the open, the amendment would also increase the compliance costs of non-residents and companies working out of the US .

      "This amendment is likely to cover a large population of Indian IT and other professionals working in the US , who will have to file details of their bank accounts henceforth or face penalty. Indian companies doing business in the US would also need to be aware of and comply with this regulation," said partner in Ernst & Young Amitabh Singh. Indians going on work visas like L-1 or H1B and short-term business travellers to the US would be required to declare their bank accounts in India .

      The Internal Revenue Service, the agency responsible for collection and administration of taxes in the US , has recently expanded the scope of a provision that makes it mandatory for residents to disclose their offshore accounts. The expanded regulation requires certain non-residents to declare their `financial account' in a foreign country if the aggregate value of these accounts exceeds $10,000 (about Rs 5,00,000) at any time during the calendar year.

      However, artists, athletes, and entertainers, who are not citizens or residents of the US and occasionally visit the country to participate in exhibits, sporting events, or performances, are exempted from making this disclosure.

      Hitherto, the provision called report of foreign bank and financial account (FBAR), first introduced in October 2008, applied only to US citizens and green card holders. The measure is a part of the US government's efforts to combat offshore tax evasion, but could increase cost of compliance for these entities, as the FBAR has to be filed separately and not with tax return.

      A financial account would include securities, securities derivatives, savings, demand, and checking deposit, an account identical to current account in India , used to securely and quickly providing frequent access to funds on demand but account balances in which do not fetch interest, or any other account maintained with a financial institution. Individual bonds, notes or stock certificates held by the filer are not covered under financial account.

      Failure to file an FBAR, can be onerous and result in civil penalties, criminal penalties, or both. The civil penalty amount could be as high as $1,00,000 per violation while criminal violation can result in a fine of up to $ 2,50,000 or five years in prison, or both. Countries across the world place various disclosure requirements on their citizens and other residents with a view to combating tax evasion. Individuals who live in the UK have to declare their all taxable income to tax authorities. Indian tax authorities amended the tax return form last year, making it mandatory for filers to disclose transactions such as property purchase or sale above Rs 30 lakh, credit card spend of over Rs 2 lakh, mutual fund investments of more than Rs 2 lakh and investment above Rs 5 lakh in RBI bonds, company equity or debentures.

      Tax authorities have independent access to information on these transactions through annual information return, filed by third parties or entities such as banks, mutual funds, registrar of properties and others responsible for carrying out these transactions. However, disclosure of details of bank accounts held abroad in the tax return is still not required in India . A former chief commissioner of income tax, K V M Pai, recently made a recommendation to the Central Board of Direct Taxes to include a column in the tax return form seeking information on bank accounts in foreign countries.

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