The Foreign Asset Investigation Units (FAIUs) have been just lately created in all of the 14 investigation directorates of the tax division positioned in varied components of the nation which might be primarily tasked to undertake raids and seizures, and develop intelligence to verify tax evasion accomplished by varied strategies.
A complete of 69 current posts in the tax division have been “diverted” by the Central Board of Direct Taxes (CBDT) in November final for the creation of this unit after approval from Union finance minister Nirmala Sitharaman, a senior officer informed PTI.
The CBDT frames coverage for the Income Tax division.
“The FAIUs have been created as new wings inside the varied investigation directorates of the tax division to carry concentrate on circumstances of undisclosed assets held overseas by Indians and black cash stashed overseas.
“India is now getting voluminous information in this context by means of varied contemporary treaties signed and a few of these which have been re-negotiated in the latest previous,” one other officer mentioned.
We at the moment are in a world regime the place automated trade of tax data is the norm. More and extra international locations and jurisdictions are following the worldwide protocols set by the Organisation for Economic Co-operation and Development (OECD) and the Financial Action Task Force (FATF) for tax transparency and combating cases of world cash laundering, terror financing and tax evasion, he mentioned.
The taxman now has big information coming in from varied worldwide and home sources to verify potential unlawful foreign assets holding of a person and therefore, a devoted wing was required to analyse this data and sift by this mountain of information, the official mentioned.
The new models can even probe circumstances of Indian entities named in world tax doc leaks just like the Panama Papers.
The main treaties or automated tax data trade protocols by which Indian tax authorities get data embrace the Double Taxation Avoidance Agreement (DTAA), Tax Information Exchange Agreements (TIEAs) and the latest Foreign Account Tax Compliance Act (FATCA) between India and the US.
FATCA covers automated sharing of data on financial institution accounts in addition to monetary merchandise like equities, mutual funds and insurance coverage, and is geared toward combating the menace of black cash stashed overseas.
Banks, mutual funds, insurance coverage, pension and stock-broking companies will report their Indian consumer particulars to the US which can be shared with New Delhi. Similarly, Indian entities will do a reciprocal data sharing about Americans.
The FAIUs can be beneath the authority of the jurisdictional director common of earnings tax (investigation) rank officer and its work can be instantly monitored by the CBDT, the officers mentioned.
The Income Tax Return (ITR) kinds even have a separate column looking for particulars of foreign assets of a person or entity and these get clearly matched with the data obtained by automated trade from world counterparts. Any mismatch requires devoted investigation and the brand new wing can very properly try this job, they added.