MANY INDIANS HAVE DEPOSITED THEIR ILLEGAL EARNINGS IN FOREIGN BANKS SITUATED IN SWITZEWLAND, GERMANY AND MANY OTHER COUNTRIES. THE MONEY SO DEPOSITED WERE RIGHT FROM THE DAY OF INDEPENDENCE 1948 ONWARDS TO TILL DATE. THE MONEY WAS DEPOSITED UNDER THE PRETEXT OF THE HIGH TAX REGIME.
AT PRESENT THE TAX RATES ARE MODERATE AND IN TUNE WITH INTERNATIONAL STANDARDS WITH SOME VARIATION WHICH IS NOT THE REASON FOR DEPOSITS MADE IN THE FOREIGN COUNTRIES. THE MAIN REASON MAY BE DUE TO UNEXPLAINABLE NATURE OF RECEIPT OR SOURCE. THE MOST IMPORTANT ASPETCT OF THE DEPOSITS IN FOREIGN COUNTRIES IS THE NATURE OF SOURCE, RECEIPT.
AS RIGHTLY POINTED OUT BY THE HON’BLE SUPREME COURT, THE ISSUE SHOULD NOT BE LOOKED FROM THE ANGLE OF TAXATION ONLY, IT HAS TO LOOKED AFTER FROM THE ILLEGALITY OF TRANSACTIONS WHICH RESULTED IN TO SUCH DEPOSITS IN FOREIGN COUNTRIES.
THE BASIC QUESTION IS, WHEN DEPARTMENT IS ENQUIRING ONLY 3% TO 4% ONLY OF THE RETURNS FILED, THE REASON FOR TRANSFERRING SUCH HUGE FUNDS INTO THE FOREIGN COUNTRIES. IT MEANS, THAT THE TAX PAYERS MAY NOT HAVE CONFIDENCE ON THE GOVT. TAX ADMINISTRATION, OR INTENTIALLY AVOIDING TO DISCLOSE THE SOURCE OF RECEIPT OF FUNDS. THE SOURCE OF RECEIPT MAY BE FROM ILLEGAL OR IMMORAL ACTIVITIES. IT IS ALWAYS A REASON FOR SUSPICION WHEN THE TRANSACTIONS ARE NOT TRANSPARENT.
THE NDA GOVERNMENT IN 2004 INTRODUCED A RETURN CALLED “ANNUAL INFORMATION RETURN” TO BE FILED BY VARIOUS AUTHRITIES IN ELECTRONCI FORM TO BRING TRANSPERANCEY AND TO REDUCE TAX AVOIDANCE.
IT SEEMS FROM 2004 THE PRESENT GOVERNMENT HAS NOT UTILISED THE ANNUAL INFORMATION RETURNS TO COLLECT THE RIGHT TAX FROM RIGHT PERSONS. IF SUITABLE ACTION IS TAKEN ON ANNUAL INFORMATION PROVDED BY VARIOUS DEPARTMENTS, THE TAX COMPLIANCES WILL INCREASE MORE, AND MONEY WOULD NOT HAVE BEEN DEPOSITED IN FOREIGN COUNTRIES.
NOW THE IDEA OF GIVING IMPORTANCE TO AGREEMENTS WITH FOREIGN COUNTRIES NOT TO DISCLOSE THE DETAILS IS NOT IMPORTANT BUT THE IMPACT ON THE ECONOMY FROM SO MANY YEARS AND YEARS TO COME IS MORE IMPORTANT. WE DONOT EXPECT THAT ANY CONTRY WILL ACCEPT FUNDS FROM ILLEGALLY EARNED SOURCES. THIS IS BASIC UNDERSTANDING IN MANY BILATERAL AGREEMENTS. THERE WILL BE GENERAL CLAUSE TO TRNASFER THE INFORMATIION WITH REGARD ILLEGAL THINGS WHICH THE OTEHR COUNTRY WHICH CAME TO NOTICE OF BOTH THE NATIONS WHO ENTERED INTO AGREEMENT.
HOW THE FUNDS CAN BE BROUGHT BACK TO THE COUNTRY:
- BY ASSURING THE DEPOSITORS THAT THE MONEY WILL BE ALLOWED IF SUITABLE TAXES ARE PAID.
- BY CONVINCING THE COUNTRIES NOT TO WITHHOLD THE FUNDS SINCE THE SOURCES ARE SUSPICIOUS.
- BY ASKING THE FOREIGN COUNTRIES TO DISCLOSE THE DETAILS IF THE DEPOSITORS HAVE NOT TRANFERRING THE FUNDS TO THE COUNTRIES TO WHICH BELONGS.
- BY CAUTIONING THE FOREIGN COUNTRIES, THAT THE BILATERAL AGREEEMENTS WILL BE BROKEN, ACTIONS WILL BE INITIATED WITH INTERNATIONAL COMMUNITIES IF THE DETAILS ARE NOT PROVIDED.
- BY MAKING THE FOREIGN COUNTRIES RESPONSIBLE FOR SOURCES OF RECEIPT FOR SUCH DEPOSITS.
- BY CAUTIONING THE DEPOSITORS FOR TAKING ACTIONS FOR SUCH DEPOSITS SOURCES IF THEY DID NOT COME FORWARD TO TRANFER THE FUNDS. INFORMING THEM THAT NOTHING IS SECRET IN THIS ELECTRONIC, TANSPERANT SITUATIONS.
- THE PERIOD OF TAKING ACTIONS ACCORDING TO TAX LAWS HAS TO BE ENHANCED TO COVER SUCH FOREIGN DEPOSITS.
- BY INCLUCATING FEAR CONCEPT STRINGENT ACTIONS IN TO THE MINDS OF DEPOSITORS.
- BY LINKING THE INFORMATION OF HNW INDIDUALS INFORMATION BASED ON ANNUAL INFORMATION RETURNS.MY ABOVE SAID VIEWS MAY BE CONSIDERED FOR PROPOSALS.
