Amid media speculation regarding a reported rise in deposits by Indian entities in Swiss bank accounts, the Government of India and a report of the Finance Ministry on Friday (June 20) clarified that these figures include a mix of funds from enterprises, banks, and individuals and must not be viewed in isolation.
India is actively collaborating on global tax transparency
To combat offshore tax evasion, India participates in several international Exchange of Information (EOI) frameworks with over 100 jurisdictions. This cooperation enables regular and structured sharing of data on foreign financial assets held by Indian residents.
Switzerland, in particular, has been sharing such data since 2018 under the Automatic Exchange of Information (AEOI) system. The first formal transmission of data to Indian tax authorities occurred in September 2019 and has continued on an annual basis, including accounts flagged for possible financial irregularities.
Data monitoring and verification by CBDT
The Central Board of Direct Taxes (CBDT) conducts regular reviews of AEOI data and initiates verification processes for identified cases. This may involve search and survey actions, open enquiries, and other investigative procedures.
For Assessment Year (AY) 2024–25, the CBDT cross-referenced AEOI data with Income Tax Returns (ITRs) filed by taxpayers. Where discrepancies were noted, such as unreported foreign assets or income, SMS and email alerts were issued requesting taxpayers to re-examine their filings.
Thousands amend returns and foreign assets worth Rs 29,208 crore reported.
As a result of this initiative-
- 24,678 taxpayers reviewed their returns
- 5,483 taxpayers filed belated ITRs for AY 2024–25
- These revised filings disclosed foreign assets worth Rs 29,208 crore and foreign income of Rs 1,089.88 crore
- Authorities have confirmed that appropriate legal action is under consideration for non-compliant taxpayers
Significant growth in foreign asset disclosures
The initiative has led to a notable increase in voluntary compliance-
- 2.31 lakh taxpayers disclosed foreign assets/income in AY 2024–25
- Reflecting a 45.17 per cent increase from 1.59 lakh disclosures in AY 2023–24
- This rise is attributed to greater awareness and a system-driven compliance approach that encourages taxpayers to declare assets transparently.
Enforcement measures for persistent non-compliance
In cases where discrepancies persist or taxpayers fail to respond, statutory and enforcement actions are being initiated under existing legal provisions to ensure accountability and deter tax evasion.