I-T tracks frequent flyers to tax havens on Rs 1L income

Tax sleuths tracking frequent flyers to international tax havens have found that some of these individuals have a declared annual income of as little as Rs 1 lakh and, in a few cases, no income at all!

This startling discovery was made after the Directorate of Income Tax Intelligence started scrutinizing 1,000-odd individuals who had made 30 to 60 trips in a year to jurisdictions like Switzerland, Bahamas, Cayman Islands, Mauritius and Dubai. The sleuths found many of these individuals had also provided false addresses while making these international trips.

In the past one year, I-T's intelligence wing tracked at least 18 lakh trips made by 14 lakh individuals to these six tax havens. Out of them nearly 13 lakh had travelled only once. Two individuals made 60 trips each in the last year to these five tax havens.

Sleuths are currently working on the expenditure details of these frequent flyers and matching their income tax returns with their credit card and hotel spendings. Sources said in most of these cases mandatory PAN numbers are missing. Many of them had not even filed their income tax returns.

Among the legitimate travellers, officials don't rule out presence of corrupt bureaucrats and politicians who have someone else footing their credit card and hotel bills during their stay abroad. All such cases are being identified.

In a related development, the Central Board of Direct Taxes – the Directorate of I-T Intelligence's controlling authority – has set up two overseas income tax units in Singapore and Mauritius, from where a lot of investment round-tripping activities are known to take place.

CBDT will soon set up eight more such units in US, UK, Netherlands, Japan, Cyprus, Germany, France and UAE, from where it is believed Indian black money flows back into the country in the form of FDI and participatory notes.

The I-T started tracking high fliers to these tax havens after the Supreme Court sought a status report on what the government was doing to bring tax evaders and money launderers to book.

The government had said it had revised tax agreements with many countries and signed special Tax Information Exchange Agreements with 20 tax havens which could help track evaders and bring back money allegedly stashed away in foreign banks accounts.

So far, the government has signed TIEAs with six jurisdictions, including Bahamas, Bermuda, British Virgin Island, Cayman Island and Isle of Man.

Efforts are on to sign agreements with other tax havens as well.
(TOI)