Executive Summary:
This document addresses a parliamentary question regarding Indian deposits in Swiss banks and black money held abroad. It clarifies the interpretation of Swiss National Bank (SNB) data, details actions taken to address illicit foreign deposits since 2014, and asserts the success of current mechanisms in preventing black money proliferation. The Black Money Undisclosed Foreign Income and Assets and Imposition of Tax Act, 2015, which came into effect on July 1, 2015, is a key focus.
Key Points / Main Content:
Swiss Bank Deposits:
* Media reports on increased Indian funds in Swiss banks are based on SNB statistics. Swiss authorities clarify these statistics include various liabilities and should not be used to analyze Indian residents' deposits in Switzerland.
* Switzerland has provided annual financial information on Indian residents since 2018 under the Automatic Exchange of Information (AEOI) framework, with data transmission to India starting in September 2019.
* India receives foreign asset and income information from 100 foreign tax jurisdictions. Tax evasion instances are addressed under Direct Tax Laws.
Black Money Details:
* The Income Tax Act, 1961, and the Black Money Act, 2015, do not define "black money."
* Under the Black Money Act (BMA), during a compliance window from July 1, 2015, to September 30, 2015, 684 disclosures of undisclosed foreign assets worth Rs. 4,164 crores were made, resulting in approximately Rs. 2,476 crores in tax and penalty.
* As of March 31, 2025, 1,021 assessments under the BMA have raised tax and penalty demands of over Rs. 35,105 crores, with 163 prosecution complaints filed. Recovery of Rs. 338 crores has been made against tax, penalty, and interest demands under the BMA from July 1, 2015, to March 31, 2025.
Actions Taken Since 2014:
* A Special Investigation Team (SIT) on Black Money was formed in May 2014.
* The Black Money Act, 2015, was enacted to address black money stashed abroad.
* Enforcement actions include investigations, searches, income assessments, and prosecutions.
* The government has taken action on credible information regarding black money in cases such as HSBC, ICIJ, Paradise Papers, and Panama Papers, including forming Multi-Agency Groups and launching prosecutions.
* The Fugitive Economic Offenders Act, 2018, allows for the attachment and confiscation of proceeds of crime and properties of fugitive economic offenders.
* India engages with foreign governments for information exchange through tax treaties and agreements.
* India participates in the Automatic Exchange of Information (AEOI) and has an Inter-Governmental Agreement (IGA) with the USA for financial account information sharing.
* The NUDGE campaign was launched in November 2024 to improve taxpayer compliance for foreign income and asset declaration, resulting in revised ITRs and belated returns reporting significant foreign assets and income.
Effectiveness of Mechanisms:
* Current mechanisms have been successful in preventing the proliferation of black money.
* Digitization and formalization of the economy have reduced opportunities for black money proliferation.
Impact Analysis:
Taxpayers:
* Impact: Taxpayers are affected through increased scrutiny of foreign assets and income, potential penalties for non-compliance, and the requirement to accurately report foreign assets and income in their Income Tax Returns.
* Action Required: Taxpayers should accurately report their foreign assets and income, respond to informational messages received under the NUDGE campaign, and comply with tax laws to avoid penalties.
Government of India (Ministry of Finance, Income Tax Department):
* Impact: The government is responsible for implementing and enforcing the Black Money Act, investigating illicit foreign deposits, engaging with foreign governments for information exchange, and promoting tax transparency.
* Action Required: The government must continue to strengthen enforcement mechanisms, pursue international cooperation, and monitor the effectiveness of measures to curb black money.
Indian Residents with Foreign Assets:
* Impact: Increased transparency and information sharing may lead to greater scrutiny of their foreign assets and potential tax implications.
* Action Required: Ensure full compliance with tax laws regarding declaration of foreign assets and income, and be prepared for potential audits or investigations.
Foreign Governments and Financial Institutions:
* Impact: Required to cooperate with the Indian government in sharing financial information and assisting in investigations related to black money.
* Action Required: Comply with international agreements and treaties related to information exchange and mutual administrative assistance in tax matters.
Key Entities Referenced
Swiss National Bank: The central bank of Switzerland, whose data on Indian deposits is referenced in the question.
Automatic Exchange of Information AEOI: A framework under which Switzerland provides annual financial information about Indian residents since 2018.
Income Tax Act, 1961: Indian law referred to in the context of defining 'black money'.
Black Money Undisclosed Foreign Income and Assets and Imposition of Tax Act, 2015: Indian law enacted to deal with black money stashed abroad.
Special Investigation Team SIT on Black Money: A team constituted in May 2014, to coordinate policy and investigation across agencies in matters related to foreign stashing of unaccounted monies.
Fugitive Economic Offenders Act, 2018: Indian law to provide for attachment and confiscation of the proceeds of crime associated with scheduled economic offences.
Inter Governmental Agreement IGA: Agreement between India and USA in 2015 for sharing of financial account information on automatic basis.
NUDGE NonIntrusive Usage of Data to Guide and Enable Taxpayers Campaign: Campaign launched by the Income Tax Department in November 2024 to improve taxpayers voluntary compliance for declaration of foreign income and assets.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UNSTARRED QUESTION 2398
TO BE ANSWERED ON MONDAY, AUGUST 04, 2025 / SRAVANA 13, 1947 (SAKA)
BLACK MONEY IN FOREIGN BANKS
2398. SHRI DEEPENDER SINGH HOODA
Will the Minister of Finance be pleased to state:
(a) whether the Government is aware that Indian deposits in Swiss banks have increased over
threefold in 2024, reaching approximately Rs. 37,600 crore, as per Swiss National Bank data;
(b) if so, the details thereof and the reasons therefore;
(c) the total quantum of black money held by Indians in foreign banks along with the details and
quantum of money brought back during the last five years;
(d) the steps taken since 2014 to identify, investigate and repatriate illicit foreign deposits held by
Indian citizens and what measurable outcomes have been achieved; and
(e) whether the Government acknowledges the failure of current mechanisms to curb the flight of
black money abroad and if so, the measures being planned to prevent further outflows and ensure
accountability.
ANSWER
MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) and (b) There are some media reports based on Swiss National Bank (SNB) statistics which
mention that Indian linked funds in Swiss banks have risen in 2024 as compared to previous year's
amount. The media reports also mention that as per Swiss authorities, the data in respect of SNB
statistics includes, inter alia, amounts due in respect of customer deposits (including in foreign
branches of Swiss Banks located in any country), other liabilities as well as amounts due to banks,and that the Swiss authorities have clarified that the SNB annual banking statistics should not be
used for analysing deposits held by residents of India in Switzerland.
It is stated that Switzerland has been providing annual financial information about Indian residents
since 2018 under the Automatic Exchange of Information (AEOI) framework. The first data
transmission to Indian authorities occurred in September 2019, and the exchange has continued
since then. Further, India receives information about foreign assets and income from 100 +
foreign tax jurisdictions. Whenever any instance of tax evasion is detected, appropriate action
under Direct Tax Laws, including searches, surveys, enquiries, assessment of income, levy of
taxes, penalties etc. and filing of prosecution complaints in criminal court, wherever applicable, is
taken.
(c) There is no expression as ‘black money’ in the Income Tax Act, 1961 (ITA) or in the
Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (BMA).
Further, since the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax
Act, 2015 came into force on 1st July, 2015, 684 disclosures involving undisclosed foreign assets
worth Rs. 4164 crores were made during the one-time three months compliance window, under
BMA, from 1st July, 2015 to 30th September, 2015. The amount collected by way of tax and
penalty in such cases was about Rs. 2476 Crores. Furthermore, till 31.03.2025, 1021 assessments
have been completed under the Black Money (Undisclosed Foreign Income and Assets) and
Imposition of Tax Act, 2015 (BMA) raising tax and penalty demand of over Rs. 35,105 crores
approximately and 163 prosecutions complaints have been filed. The tax demand gets crystallized
conclusively when appeals, if any, preferred before CIT(A), ITAT, Hon’ble High Court and
Hon’ble Supreme Court are decided. Notably, from 01.07.2015 to 31.03.2025 recovery to the tune
of Rs.338 Crores has been made against tax/ penalty/ interest demand raised under the Black
Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
(d) Steps taken since 2014 to identify, investigate and repatriate illicit foreign deposits held
by Indian citizens are listed as below:
(i) Special Investigation Team (SIT) on Black Money under the Chairmanship and Vice-
Chairmanship of two former Judges of the Hon’ble Supreme Court was constituted in May 2014,
to coordinate policy and investigation across agencies in matters related to foreign stashing of
unaccounted monies.(ii) Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
which has come into force w.e.f. 01.07.2015 has been enacted to specifically and effectively deal
with the issue of black money stashed abroad.
(iii) Effective enforcement actions have been undertaken including expeditious investigation
in foreign assets cases. Such actions include searches, surveys, enquiries, assessment of income,
levy of taxes, penalties, etc. and filing of prosecution in criminal courts, wherever applicable.
(iv) The Government has taken pro-active and effective steps whenever any credible
information has been received with regard to black money abroad, whether in HSBC cases, ICIJ
cases, Paradise Papers or Panama Papers. These steps include constitution of Multi-Agency Group
in relevant cases, calling for definite information from foreign jurisdictions, bringing the black
money to tax under relevant law, launching prosecutions against the offenders etc.
(v) The Fugitive Economic Offenders Act, 2018 has been enacted to provide for attachment
and confiscation of the proceeds of crime associated with scheduled economic offences and the
properties of the fugitive economic offenders and deter them from evading the process of Indian
law by remaining outside the jurisdiction of Indian Courts.
(vi) The Government of India has been proactively engaging with foreign governments, for
exchange of information, and has entered into tax treaties including Double Taxation Avoidance
Agreements, Tax Information Exchange Agreements, the Multilateral Convention on Mutual
Administrative Assistance in Tax Matters and the SAARC Multilateral Agreement, with other
countries which provide for mutual administrative assistance including exchange of information
concerning taxes.
(vii) India has also joined the Automatic Exchange of Information (AEOI) based on the
Common Reporting Standard and receives financial account information of Indian residents in
other countries with which the AEOI relationship is activated. India has also entered into an Inter-
Governmental Agreement (IGA) with USA in 2015 for sharing of financial account information
on automatic basis.
(viii) The NUDGE (Non-Intrusive Usage of Data to Guide and Enable) Taxpayers Campaign
was launched by the Income Tax Department in November 2024 to improve taxpayers’ voluntary
compliance for declaration of foreign income and assets. Under the campaign, informational
messages were sent via SMS and email to selected resident taxpayers in respect of whom
information has been received under the Automatic Exchange of Information that they are holding
foreign assets and/ or having income from foreign sources, to accurately report foreign assets and
income from foreign sources in their Income Tax Returns. Total of 24,678 taxpayers reported
their foreign assets and income in revised ITRs for AY 2024-25, while 5,483 taxpayers filedbelated returns reporting foreign assets worth ₹29,208 crore and foreign income of
₹1,089.88 crore.
(e) The current mechanisms have been successful in preventing the proliferation of black
money, and have promoted a concerted global effort for curtailing bank secrecy for tax purposes
and promoting tax transparency. These measures have further been accompanied by digitization
and formalization of economy which have led to further reduction in the opportunities for
proliferation of black money.
*********