Income Tax Notices have been issued by the Income Tax Department and the Enforcement Directorate. In respect of Income Tax Department, assesses including, non-resident assesses are served notices/summons consequent to the initiation of various proceedings under the Income-Tax Act, 1961, including, for assessment of income, collection, recovery and taxes, whenever required. Where information is received indicating holding of assets by NRIs, necessary enquiry is made to examine whether the assets have been disclosed in any returns of income and whether the assets would have been acquired from income chargeable to tax in India.
No such incidence has come to the notice of Enforcement Directorate (ED) and Ministry of External Affairs whereby to escape this harassment, NRIs are changing their addresses in their passports to their current addresses in countries where they reside thereby establishing their tax residency status abroad. In respect of Income Tax department, the persons are liable for taxation on income/transaction originated/attributed to India irrespective of their addresses. Giving-up of Indian addresses may not result in escaping scrutiny by the Department. Specific cases of NRIs giving-up Indian addresses solely for this purpose have not been noticed.
Under the Exchange of Information (EOI) Article present in Indian tax treaties, Indian Tax authorities can make requests for banking information. In cases where a request is made, the concerned authorities in the requested jurisdiction are able to gather banking information from the relevant banks which is then exchanged with India. In cases where the treaty does not contain a provision to exchange banking information, such exchange may not be possible.
The information for assistance in Criminal matters under Prevention of Money Laundering Act (PMLA), 2002 is sought under Mutual Legal Assistance Treaty (MLAT) or Assurance of Reciprocity. The Central authorities of the requested jurisdictions arrange banking information according to their domestic laws and share with Indian authorities.
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