Why super-rich Indians are facing ED and I-T's probe
What's the story
The Enforcement Directorate (ED) and Income Tax (I-T) Department are reportedly intensifying their probe against Indian high-net-worth individuals (HNIs) with undisclosed foreign assets. According to CNBC-TV18, the agencies are independently tracking hidden wealth in European nations and tax havens like the British Virgin Islands and Dubai. The ED is probing under the Foreign Exchange Management Act (FEMA), specifically if offshore companies were set up just to acquire and maintain properties abroad.
Black Money Act
I-T department's investigation targets undeclared financial interests
The I-T Department is carrying out its probe under the Black Money Act, targeting HNIs with undisclosed bank accounts and other overseas financial interests. These include cash-value insurance contracts, business interests, custodial accounts, equity and debt investments, and trusts. The department is also looking into any discrepancies between declarations of foreign assets in income tax returns and its internal data.
Disclosure deadline
I-T department's disclosure window for foreign assets closed
The I-T Department had given a special window to HNIs to voluntarily disclose their foreign assets, which closed on March 31, 2024. In an advisory in November, the department had warned that not disclosing foreign assets or income in tax returns could attract a penalty of ₹10 lakh. This was part of the government's efforts to ensure transparency and compliance with tax laws.