India’s income tax department is unlikely to press criminal charges against more than 100 wealthy Indians who had secretly stashed funds in Swiss bank accounts, reported Bloomberg News on Tuesday, with the amnesty offer valid to only those who willingly repatriate the money back to India and pay off their back taxes.
The decision came after a list of 700 citizens with HSBC accounts in Geneva had been given to the South Asian nation’s government by French authorities last year, which found that many Indians had been illegally hiding their money in HSBC’s Swiss unit for years.
But the Indian government may not even levy a penalty against these tax cheats, said a government official who requested anonymity, with asset retrieval seen to be the bigger priority.
“It's a pragmatic approach,” said R.K. Gupta, managing director at Taurus Asset Management to Bloomberg.
Bringing back money that hasn't been accounted for is now a “global phenomenon,” he added.
According to Arun Kumar, author of “The Black Economy in India,” India presently loses nearly 14 trillion rupees ($250 billion) a year from tax evasion, with the super-rich seen to be the chief culprits.
The value of illicit Indian assets held abroad is also now around US462 billion, claimed a November 2010 report from Global Financial Integrity, or just about 72 percent of the nation's underground economy.
Related: Switzerland: Tax Haven No More?
But despite a 108-page report released this May by the government, titled the "White Paper on Black Money”, many Indians still feel that authorities are not doing enough to crackdown on tax evasion.
An editorial in FirstPost, for instance, questioned whether the government had the legal right not to press charges against tax evaders:
“When the holding of undeclared foreign currency accounts is a crime, how can the tax department deal with it as if it was something normal?”
“Second, since the Swiss bank list is available both to our politicians and the tax department, what is the possibility that this power will not be used to blackmail people and collect bribes?”
Three, when black money is such a big issue politically and geopolitically, can the tax department just do quiet deals with tax evaders?”
In an interview with the Wall Street Journal, Uday Ved, head of tax at KPMG India, also said that an amnesty should be out of the question for tax evaders
Possessing black money is a clear case of concealment of income, which should automatically attract a penalty, he said.