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Finance Ministry refutes news reports about black money held by Indians in Switzerland

Today, there have been some such reports in the media in which it has been said that the amount of Indians in Swiss banks has increased from Rs 6,625 crore (CHF 899 million) at the end of 2019 to Rs 20,700 crore at the end of 2020, reversing the two-year downward trend. Rupees (CHF 2.55 billion). It has also been said in the news that this figure is also the highest in the amount deposited in the last 13 years.

Media reports point to the fact that the figures included in the news are official figures reported by banks to the Swiss National Bank (SNB) and do not indicate the quantum of alleged black money held by Indians in Switzerland . Further, these figures do not include money that Indians, NRIs or others may have held in Swiss banks in the name of third country entities.

However, customer deposits have actually declined since the end of 2019. Funds held through fiduciary institutions have also declined by more than half since the end of 2019. The biggest increase has been in other amounts payable by the customers. These funds are in the form of bonds, securities and various other financial instruments.

It is pertinent to mention here that India and Switzerland are signatories to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAAC) and both the countries have also signed the Multilateral Competent Authorization Agreement (MCAA) under which the calendar between the two countries Automatic Exchange of Information (AEOI) mechanism is in place for sharing of financial account information on an annual basis for the year 2018 and beyond.

The exchange of financial account information relating to residents of each country between the two countries took place in 2019 as well as in 2020. Given the current legal regime for exchange of financial account information (which has a significant deterrent effect on tax evasion through undeclared assets abroad), there is no reason to increase deposits in Swiss banks from undisclosed income of Indian residents. Doesn’t appear to be a significant possibility.