Non-disclosure of overseas assets will become a “very risky affair” from 2017, minister of state for finance Jayant Sinha said on Thursday.
Addressing the sixth meeting of the Group on Automatic Exchange of Information (AEOI), he said the Central Board of Direct Taxes (CBDT) has constituted an ‘Information Security Committee’ to ensure confidentiality of foreign data received.
“Non-disclosure of foreign assets will increasingly become a very risky affair for tax payers... Strict bank secrecy has ended, and a new environment of transparency is now operational,” he said.
He said offshore tax evasion and flow of illicit money can be addressed only by automatic and free flow of financial account information among countries.
“Income tax rules and guidance notes are formulated taking into consideration requirements of both Common Reporting Standards and Foreign Account Tax Compliance Act,” he said. “India is an early adopter of Common Reporting Standard and committed to adopting it by 2017. We have taken a number of steps ... so that we can transmit the first information related to calendar year 2016 to treaty partners in September 2017.”
Sinha also said the current regulatory framework on Participatory Notes (P-Notes) is strict and robust, an indication that the government is not looking at any revision of rules.
This is significant as a Supreme Court-appointed Special Investigation Team on black money had in July asked capital markets regulator Sebi to review its regulations on P-Notes and identify their end-users.