PanamaPapers: India to probe hundreds for possible tax evasion
April 5, 2016, 6:10 am

File photo: Indian Prime Minister Narendra Modi with Indian film star Amitabh Bachchan. Bachchan is named in the “Panama Papers” leak [Image: narendramodi.in]

500 Indians, including top Indian film stars, business honchos and politicians, have been named in the list for alleged offshore holdings. According to an Indian Central Bank notification, those Indians setting up or buying foreign companies before 2013 are in ‘technical’ violation of Indian laws.

Indian Prime Minister Modi has vowed to take action against all unlawful accounts held abroad.

“A multi-agency group is being formed to monitor the black money trail,” Indian Finance Minister Arun Jaitley said in New Delhi on Monday.

The Indian Finance Ministry has initiated the formation of a probe team that will comprise officers from the Central Board of Direct Taxes’ Financial Intelligence Unit, its Tax Research Unit as also officials from the Central Bank of India.

“The group will monitor the flow of information in each one of the case. The government will take all the necessary actions as required to get maximum information from all sources including from foreign governments to help in the investigation process,” a Finance Ministry statement said.

Indian daily Business Standard says the key to the expose affecting Indians named in the list is “the disclosure element”.

“If individuals have kept the central banker and the government of their investments abroad through these companies, then there is a weak case. But if the authorities were not informed of the assets held abroad then there are various acts that are triggered, such as the money laundering act and FEMA, among others,” says the report. (FEMA refers to India’s Foreign Exchange Management Act)

Illegal deposits abroad cost India billions of dollars in lost revenue.

In 2015, India passed a tough rule against so-called “black money”, or assets illegally held outside the country to avoid tax, vowing stiffer punishments. Bringing back “black money” was an integral part of the 2014 electoral campaign of Indian Prime Minister Narendra Modi.

Earlier in 2014, during his second radio address to the nation since coming to power, Modi said the money stashed abroad illegally belonged to the poor of the country.

“The issue is an article of faith for me,” Modi said.

The “Panama Papers” have exposed financial arrangements of politicians and public figures including relatives of Prime Ministers of Britain, Iceland and Pakistan, friends of Russian President Vladimir Putin and the President of Ukraine Petro Poroshenko.

Poroshenko is battling allegations in the documents that he had used an offshore firm to avoid tax.

The leak of 11.5 million documents from the Panama-based law firm Mossack Fonseca shows 140 political figures around the world have alleged links to offshore accounts.

The “Panama Papers” were obtained from an anonymous source by German daily Sueddeutsche Zeitung and shared with media worldwide by the International Consortium of Investigative Journalists (ICIJ).

TBP and Agencies