India will not get a magic window through the new Swiss law to access the country's money stashed illegally in secret bank accounts in Switzerland. In fact, the new black money pact with the Swiss is pretty much useless for accessing money which has already been squirreled away abroad. At best, it might prove to be of some use in tracking future illegal transfers.
Finance minister Pranab Mukherjee has stated that while countries have accepted to end bank secrecy in general, some countries have agreed to do so only from a prospective date and are not willing to exchange past banking information. The new law approved by the Swiss parliament is seen to fall in this category.
However, a senior Indian Revenue Service (IRS) officer told Mail Today that under the Income Tax Act cases that go back to six years ago can be opened up in the current assessment of income tax payers if required. This information can then be obtained from the Swiss authorities.
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"No government introduces a law with retrospective effect but that does not mean that old cases which have been thrown open for scrutiny in current assessments cannot be looked into," he pointed out. He said the new Swiss law does not allow limitless access but is a positive development.
The onus now rests with the income tax (I-T) authorities . If the I-T department does its spade work well, the Swiss authorities will provide the information. The new Swiss law has come after pressure being built up by the G-20 leadership with France and Germany spearheading the effort. "India is in fact a beneficiary of the move of the Western countries seeking to bring their tax evaders to book and now needs to make the most of this opportunity,'' an IRS officer said on the condition of anonymity.
Some senior officials are of the view that the veil of secrecy over the Swiss banking system has not been lifted as the old cases have been left out of the ambit of the new law since it is applicable with prospective effect. It also comes with the rider that "fishing expeditions" to peep into bank accounts of individuals will not be allowed.
However, those who view the development as positive point out that no country in the world will allow roving enquiries into private bank accounts. The I-T department has to establish a case and then ask for specific information.
The Swiss parliament on Friday gave approval to amendments to tax treaties with countries, including India, that makes it easier for them to access information about the illegal funds held by their nationals in Swiss private banks. The upper house of the Swiss parliament endorsed amendments to double-taxation agreements (DTAAs) in line with internationally applicable standards.
Courtesy: Mail Today