The tax department has asked non-resident Indians (NRIs), expats, and foreign investors in PE and hedge funds to disclose their bank accounts held across the world, reports The Economic Times.
The bizarre demand has left many perplexed as they are not comfortable sharing details of their foreign accounts with the I-T department which, in any case, cannot tax earnings generated from such assets.
Fearing non-disclosure could land them in trouble, many of these individuals have approached tax practitioners and lawyers to help them deal with this issue.
Most of them have chosen not to file their return until the last date and some are reporting only one foreign or Indian bank account to collect tax return in the hope the government will soon come out with some clarification.
According to tax norms, income earned by non-residents outside the country are not taxable in India. In fact, many Indians become stay abroad for 182 days every year to avoid paying tax on such income. According to the report, tax authorities suspect black money is being legitimised by misusing this norm.
The current move appears to be a follow up on the tax department's crackdown two years ago. The government had then asked all resident Indians to disclose their offshore bank accounts after data leaks revealed information on many Indians who had undisclosed overseas accounts.
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