Jaitley: Not all money deposited in Swiss banks is black

The Union Minister Arun Jaitley said on Friday that all money deposited in Swiss banks is not black money, but he warned that those Indians who have illegal deposits in Swiss banks would face harsh penal proceedings once Switzerland starts real time sharing of details of accounts from January onwards.

Jaitley’s remark came at a time when the Modi Government is facing criticism after latest data from the Swiss National Bank showed that money parked by Indians in Swiss banks rose over 50 per cent to Swiss Franc (CHF) 1.01 billion (₹7,000 crore) in 2017. Interestingly, this reversed a three-year downward trend.

“Those who participate in a public discourse must understand these basic facts before expressing an opinion which may be ill-informed.

“To assume that all the deposits are per se tax evaded money or that Switzerland in the matter of illegal deposits is what it was decades ago, is to start on a shaky presumption,” Jaitley, who is recovering from renal surgery, wrote in a blog.

According to him, past investigations by the tax department have shown that this (over ₹7,000 crore) includes funds held by persons of Indian origin who now hold foreign passport and monies belonging to Non-Resident Indians. There were also monies belonging to resident Indians who have made legitimate investments abroad, including transfer of money under the liberalised remittance scheme. “It is only monies kept by resident Indian outside these categories which become actionable,” he said. Jaitley, who was Finance Minister and currently Minister without any portfolio, termed reaction on increase in deposits by Indians in Swiss banks as ‘misinformed.’

Noting that Switzerland in financial disclosures was always a reluctant state, he said that the Alpine nation has amended its domestic laws involving all disclosures and entered into a treaty even with India and real time flow of information with regard to Indians would be made.

“The flow of information is starting in January 2019. Any illegal depositor knows that it is a matter of months before his name becomes public and he will be subjected to the harsh penal provisions of the black money law in India,” he said.

Tax collection

He said that this government has a multi-pronged strategy to increase the tax base.

“The first big news for this year is that the advance tax deposit during the first quarter of this year has seen a gross increase of 44 per cent in the personal income tax category and 17 per cent in the corporate tax category,” he mentioned. According to him, the first 67 years after Independence from 1947 to 2014 saw a total number of 3.82 crore assesses filing tax returns. Obviously, in comparison to total population of almost 1.3 billion, this figure appears highly inadequate.

The total direct tax collection (income tax) in 2013-14 was ₹6.38 lakh crore. However, during four years of Modi government, the number of assessees has increased by 64.6 per cent.

The total number of returns filed was 6.86 crore in 2017-18. The number of new assessees who filed returns in 2017-18 were 1.06 crore.

“I hope that the percentage increase when the government completes its first five years would be significantly higher,” he claimed, while adding that the total income tax collection for the year 2017-18 is ₹10.02 lakh crore, a four year increase of 57 per cent.

COMMENT NOW