India has absolutely no idea how much of its money lies in Swiss banks

India has absolutely no idea how much of its money lies in Swiss banks
Image: Ruben Sprich (Reuters)
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It’s been nearly six years since India inked a deal with Switzerland on sharing financial account information, but it hasn’t helped much.

The country has no official estimate on the money deposited by Indian citizens and companies in Swiss banks, the government has informed (pdf) parliament. By 2021, the amount had reportedly reached the highest level in 14 years.

In November 2016, India and Switzerland had signed a deal for automatic exchange of information in tax matters.

Tackling tax evasion

The Indian government has assessed 368 cases under the black money law for undisclosed foreign income and assets, raising tax demand against more than 14,820 crores rupees ($1.9 billion), finance minister Nirmala Sitharaman told the Lok Sabha on July 25.

More Rs8,468 crore lying in unreported bank accounts in HSBC had so far been taxed, she said, levying penalties of nearly 1,300 crore.

Refuting media reports, the finance minister said, “...it is frequently assumed that any assets held by Indian residents in Switzerland are undeclared (so-called ‘Black Money’).”

Historically, Swiss banking have been perceived as sworn to secrecy on behalf f their clients and customers. They are attractive among the wealthy given the low risks and considerable privacy.

This, in turn, has often been misused by elite fraudsters. In India, repatriating “black money” has for long been part of political agenda.