New Delhi [India], Aug 3: The Income Tax Department (IT) has detected undisclosed income worth Rs. 125 Crore under the Foreign Account Compliance Act (FATCA).
Post verification of around 9000 cases, the Directorate General of Intelligence and Criminal Investigation and Department of Income Tax detected this undisclosed income.
The IT Department has recommended penalties under Section 43 of the Black Money Act in over 700 cases. Assessing Officers have also been advised to impose penalty and prosecution under section 49&51 of the Black Money Act.
“We had seen a sharp increase of undisclosed amount of Rs. 125 Crore as earlier on first exchange of information of calendar year 2014 we detected undisclosed income of only Rs. 27 Crore,” a senior IT officer said on the condition of maintaining anonymity.
He added that imposition of penalty of Rs. 1 lakh has been recommended in 100 cases.
Adding to this the senior official said that out of 9000 cases, the department has found more than 1100 incomplete or foreign addresses.
He further elaborated that incomplete address means that most of the information pertains to individual persons employed with multinational companies, who are very mobile and are on routine foreign assignments.
“Due to this they mostly stay in rented apartments for short duration and thus their addresses keep changing. Under FATCA income tax department received data for calendar year 2016 from 39 countries covering nearly 1.2 lakhs persons. In almost 61 thousand cases Indian address was not available. Out of 1.2 lakh persons, PAN is available only in 34 thousand cases,” he added.
The USA enacted law FATCA in 2010 with the objective of tackling tax evasion through obtaining information is respect of offshore financial accounts maintained by USA residents and citizens.
The provisions of FATCA essentially provide for 30 percent withholding tax on US source payments made to Foreign Institutions unless they enter into an agreement with the Internal Revenue Service to provide information about accounts held with them by USA based persons or entities (firms/companies/trusts) controlled by USA persons.