Panama Paper leak: Give yearwise details of funds sent overseas by Indians, RBI tells banks

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New Delhi | Updated: May 6, 2016 9:39:19 AM

After The Indian Express published the list of names, the Income Tax department sent queries to several individuals as a part of its investigation. Several Indians named in The Panama Papers have claimed that the offshore accounts they set up via Mossack Fonseca conform to RBI rules and were declared to the I-T department.

rbiLast month, RBI Governor Raghuram Rajan, while making clear that there could be legitimate reasons for accounts outside the country, said the central bank will investigate if all accounts set up by Indians are legitimate or not. (Reuters)

The Reserve Bank of India (RBI) has sought details from banks on outward remittances of Indians whose names figure in The Panama Papers, published by The Indian Express after an eight-month investigation in collaboration with the International Consortium of Investigative Journalists.

A source, who reviewed the RBI communication to the banks, said the central bank has sought details of year-wise outward remittances under the Liberalised Remittance Scheme (LRS) of individuals whose names figure in the files of Panamanian law firm Mossack Fonseca. These include actors Amitabh Bachchan and Aishwarya Rai, Supreme Court lawyer Harish Salve and real estate major DLF’s chairman K P Singh.

The RBI move comes after the government announced a special multi-agency probe to look into all cases of Indians with offshore entities in tax havens. The probe will look into the legitimacy of the accounts of Indians named in the ongoing investigation into The Panama Papers. The RBI is part of the multi-agency group.

An email sent by The Indian Express to the official spokesperson of the RBI remained unanswered.

Last month, RBI Governor Raghuram Rajan, while making clear that there could be legitimate reasons for accounts outside the country, said the central bank will investigate if all accounts set up by Indians are legitimate or not.

After unveiling the first bi-monthly monetary policy for 2016-17, Rajan said: “The LRS allows you to take money outside. Yet to see what is legitimate and what is not legitimate. That’s the process of investigation that will take place.”

Under the LRS, a resident Indian can freely remit $250,000 overseas every financial year for a permissible set of current or capital account transactions.

More than 11 million documents from the secret files of Mossack Fonseca have revealed a list of individuals who paid the firm to set up offshore entities in tax havens around the world.

Over 500 Indians figure on the firm’s list of offshore companies, foundations and trusts. The Indian Express investigation has shown there are also 234 Indian passports (handed over by clients as part of the incorporation process).

After The Indian Express published the list of names, the Income Tax department sent queries to several individuals as a part of its investigation. Along with the standard queries sent nationwide, the tax authority sent a set of specific questions, seeking details of declarations and permissions (obtained to float offshore firms). In some cases, the tax department conducted surveys of business establishments of certain individuals who had incorporated offshore companies through Mossack Fonseca.

“The I-T department has already started its investigations. Queries and surveys have been initiated by the tax department. But going by the number of Indians named in The Panama Papers, it will take the department at least six months to conclude its probe and penalise people who may have evaded taxes,” a senior IT official said.

Several Indians named in The Panama Papers have claimed that the offshore accounts they set up via Mossack Fonseca conform to RBI rules and were declared to the I-T department.

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