The Income-Tax Department has raised tax demand of Rs 24.66 crore on the 18 Indian nationals who had bank accounts with the LGT Bank of Liechtenstein, Mr S.S. Palanimanickam, Minister of State for Finance, has said.
This tax demand was raised on the basis of information provided by German tax authorities under the Article concerning exchange of information of the double taxation avoidance agreement (DTAA) between India and Germany read with the Protocol thereto, Mr Palanimanickam said in a written reply to a Rajya Sabha question.
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. Notices for imposition of penalty and prosecution under various provisions of the Income-Tax Act have been issued, Mr Palanimanickam has said.
Illegal fund flow
Meanwhile, to another question related to steps taken by the Government to check illegal flow of funds to foreign countries, the Finance Minister, Mr Pranab Mukherjee said in a written reply that the Directorate of Income-Tax (transfer pricing) had detected mispricing of Rs 10,945 crore in financial year 2009-10 and also detected mispricing of Rs 22,838 crore up to January 2011 in current fiscal, which has prevented shifting of an equivalent amount of money outside India.
Mr Mukherjee also said that whenever there was 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.
The Finance Minister cited an example wherein the German tax authorities provided to the Indian Government information available with them regarding bank accounts concerning Indian nationals with the LGT Bank of Liechtenstein.
Last year, Germany had provided information on the names of Indians having secret bank accounts with LGT Bank of Liechtenstein. These names were part of about 1,400 stolen bank account details that were purchased by Germany, which shared the related details with India.
The Indian Government had submitted to the Supreme Court in a sealed cover the names it got from Germany. Mr Mukherjee however declined to make them public, citing confidentiality clause in DTAA with Germany.