MUMBAI: After foreign bank accounts, stock holdings and trusts in tax havens, it’s the turn of offshore property deals of wealthy Indians to come under the taxman’s lens.
At least half a dozen resident Indians were, last week, confounded by summons from the Income Tax (I-T) Department on their purchase of properties in Switzerland and Portugal. For the first time, residents have been questioned about property acquisitions in countries that were till now outside the taxman’s radar for realty investments.
Indian revenue authorities are routinely inundated with overseas financial assets information of citizens.
This is part of the automatic exchange of information pact under a common reporting standard (CRS) developed by the Organisation for Economic Cooperation and Development (OECD) a decade ago. More than 100 countries are signatories to this arrangement.
CRS data are shared by banks, financial institutions and, in some cases, trustee service providers.
However, the data have been largely confined to names and addresses of Indians having foreign bank accounts, exposures to securities and funds, or identities of beneficial owners, trustees and, sometimes, protectors of trusts formed in jurisdictions such as Jersey, Guernsey and Bahamas to ring-fence family wealth and slush money.
Typically, financial institutions do not share information on property purchases.
In the past few years, though, many resident Indians have invested in properties under schemes floated by countries (such as Portugal) offering citizenship, permanent residency and 10-12-yearlong golden visas, as in the United Arab Emirates (UAE).
