In a major impetus in its fight against black money, India will now automatically receive information on Swiss bank accounts of its citizens from September 2019. The country has been trying to control the problem of corruption and black money by adopting different measures. Recently, Prime Minister Narendra Modi announced demonetisation of Rs 500 and Rs 1,000 notes to clamp down on black money hoarders and terror financing.
Alleged use of Swiss bank account by politicians and business tycoons has been an election issue since the ‘Anna andolan’ in 2013. The protests and growing sentiment against black money and corruption in the country led to fall of 10-year-long Congress rule and a clear majority to BJP in 2014 General Elections. Meanwhile, the issue of Swiss bank accounts and black money is also being raised ahead of Punjab assembly elections as the Aam Aadmi Party released alleged Swiss bank account details of former state CM and Congress leader Amarinder Singh and his family on Monday.
While Switzerland has conformed to the global standards on automatic exchange of information with the signing of the declaration, India, on its part, has promised to safeguard the
confidentiality of the data.
“It will now be possible for India to receive from September, 2019 onwards, the financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis,” said a Finance Ministry statement.
Describing the signing of declaration as a ‘big step’, Revenue Secretary Hasmukh Adhia tweeted: “The income tax department will be able to obtain information from accounts of all Indians stashed in Switzerland from 2018 onwards.”
The Swiss Federal Department of Finance said in a statement that the signing of the joint declaration with India confirms Switzerland’s international commitment to implementing the automatic exchange of Information (AEOI) standard.
“Switzerland is thus strengthening its network of AEOI partner states. India meets in particular the high demands in terms of adherence to the principle of speciality and the safeguarding of confidentiality for the data delivered, which are prerequisites for the introduction of the AEOI,” it said.
Switzerland, which has always been at the centre of the debate on black money allegedly stashed by Indians abroad, used to be known for very strong secrecy walls till a few years ago around its banking practices.
A huge global pressure has resulted in Switzerland relenting on the tough secrecy clauses its local laws gave to the banks. Several information requests on details about Indians who had accounts in Swiss banks are still pending.
Tuesday’s declaration, however, does not talk about exchange of information based on stolen data or pending requests from India.
Following the government’s demonetisation of high value currency notes earlier this month as a crack down on domestic black money, some opposition parties have been demanding that the government take action to bring back the unaccounted Indian money stashed abroad, particularly in Swiss banks.