From September 2019, tax authorities in India will be able to access banking details of Indian account holders at Swiss banks.
Tax authorities of India has confirmed that first automatic exchange of financial account information(AEOI) under CRS will start in September, 2019. “This will help the Government of India to fight against the black money as the era of Swiss bank secrecy will be finally over”, said Income Tax Department.
Is it worth doing this now in Sept, 2019?
No. According to the latest data shared by Swiss National Bank, money parked by the Indian individuals and enterprises at Swiss banks decline by 6 per cent in 2018 to 955 million Swiss francs (around Rs. 6757 crores). Which is even less than a billion. However, we had rumors of around 200 Lakh crores in Swiss banks.
How this has happened? Actually, after the multiple campaigns and awareness of Swiss banks in India, people who had black money in their accounts had moved it somewhere else since 2011. So, that might be the reason that we’re just left with the above mentioned amount. But the official will get the remaining black money back in India and will also insure this will not happen again.
How Black Money Gets White
Firstly, the cash got transferred from one country to another via the complex network of mediators around the world. If the amount is huge then the account holder can ask bank to convert it into white. Secondly, the Participatory notes.
Participatory notes are the financial instruments through which individual foreign investors can invest in Indian stock market. They can invest without disclosing their details. Registered foreign institutional (FIIs), foreign banks and brokerages based in India issue P-notes to foreign investors and invest in Indian stock market on their behalf. Any capital or dividend gain collected from the underlying security go back to the investors.
Participatory notes is a kind of legal way to convert black money into white for corrupt people.
To sum up, Government of India has took a step foreword to recover the black money in Swiss banks. From now onward, tax officials will be monitoring the accounts of Indian residents at Swiss banks.