The government has imposed a penalty of Rs 24.66 crore on 18 individuals who have bank accounts with LGT Bank of Liechtenstein on the basis of information provided by the German authorities, Finance Minister Pranab Mukherjee told the Rajya Sabha. In a written reply to the Upper House, Mukherjee said that notices for imposition of penalty and prosecution under various provisions of the Income Tax Act, 1961, have been issued to the concerned individuals.

“Based on the information received, income amounting to Rs 39.66 crore was assessed/re-assessed in the hands of 18 individuals being beneficiaries and tax demand of Rs 24.66 crore raised,” he said. The minister said that the Directorate of Income Tax has detected mispricing of Rs 22,838 crore during the first ten months of the current fiscal “which has prevented shifting of an equivalent amount of money outside India”. “Whenever there is credible information about international transfer of funds having possible tax implications in India, action is taken to investigate the same and bring to tax undisclosed income, if any,” Mukherjee said. In this regard, he pointed to the information furnished by the German tax authorities from LGT Bank. Germany had last year provided the names of some Indians having secret accounts in Liechtenstein’s LGT Bank. These names were part of about 1,400 stolen bank account details that were purchased by Germany, which later shared the related details with India. The government has submitted to the Supreme Court the names it got from Germany, but has refused to make them public, citing secrecy clause in its treaties with foreign countries. The government is under intense pressure from the opposition, as also courts, to act tough against those who have amassed illicit wealth in foreign countries that have strict secrecy rules. In his reply, Mukherjee further said the Directorate of Income Tax (International Taxation), which deals with the taxation of non-residents, has collected taxes of Rs 17,434 crore during the April-January period of the current fiscal. During the whole of 2009-10, the total tax collected from non-residents was Rs 17,167 crore. Meanwhile, Minister of State for Finance S S Palanimanickam told the Rajya Sabha that German Authorities provided details regarding the LGT Bank under provisions relating to the Double Taxation Avoidance Agreement (DTAA). “This information has been provided by the German authorities under the article concerning exchange of information of the DTAA between India and Germany…,” he said.

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September 2021