The Income Tax (Investigation) unit has sent detailed questionnaires to Indian clients of Panamanian law firm Mossack Fonseca, official sources told the Indian Express. The global tax avoidance expose, now called as Panama Papers, had prompted Prime Minister Narendra Modi on April 8 to seek a first status report within 15 days.
The dispatch, which is in two parts, was sent to 50 Indian clients of the law firm, according to the Indian Express report. The first questionnaire is a simple one that seeks to authenticate the identity of the person named in the Panama Papers. It also wants to confirm if any comments attributed to them on the offshore entities listed against their names were given by them.
The second, a detailed questionnaire, has sought information on clearances obtained, if any, to incorporate an offshore entity and how the money was transferred for this. It calls for information on shareholders and directors of the entity, and assets, transactions and deposits maintained by it — even under India's Liberalised Remittance Scheme (LRS).
Several people named have confirmed that they had only made deposits under the LRS and also declared the existence of the offshore entities to the tax authorities, officials told IE. However, the IT (Investigation) unit has come across instances of "partial disclosure", wherein a few entities are declared with tax authorities and a few others omitted from a mention in Income Tax returns (ITRs).
According to the complexity of the investments involved, both the simple and detailed questionnaires have been given three and 20 days time, respectively, to respond.
The investigative units looking for multiple strands of enquiry had made an assessment from existing databases of the categories of people covered, since a multi-agency probe was ordered by Finance Minister Arun Jaitley April 4. "The first to receive notice by the IT Department would be that category of people, who had made no disclosure about the offshore firms," reported IE.
On last year's "compliance" scheme, which offered a window of opportunity for people to come clean on undeclared assets overseas, the official said they are yet to find out if any of Mossack Fonseca clients had declared incorporation of entities in such tax havens.