Tax authorities can investigate NRIs with offshore bank accounts until they give consent for information sharing

NRIs with offshore bank accounts would not be able to escape the investigation by tax authorities. If found guilty, they will have to instruct the overseas banks to share their account information with the Indian tax office to prove themselves innocent.

Only after the authorities are convinced that the money in the account does not belong to the person who has been pulled up for hiding offshore assets, would they be able to escape their eyes.

In a recent case, the Bombay High Court has dismissed the writ petition filed by an NRI, who was an alleged beneficiary of a trust which was linked to an HSBC Geneva account, after she refused to sign the "consent waiver" form. Due to secrecy rules, Switzerland banks and tax havens don’t divulge account information until they get consent from account holders.

The court, in its order dated April 5, said, "In the normal course of human conduct if a person has nothing to hide and serious allegations/questions are being raised about the funds, a person would make available the documents which would put to rest all questions which seem to arise in the mind of the authorities."

Since the petition was not withdrawn, the order would most likely be used by the taxmen against those they suspect to have HSBC Geneva accounts.

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