In a fresh threat to the flow of information about Indians holding accounts in foreign banks, Switzerland on Thursday said that information exchanged with India under its tax treaty can't be disclosed "in principle" to a court or any other body outside the proceedings of a "specific and relevant" case.
This Swiss clarification came a day after the government was ordered by the Supreme Court to hand over all the 627 names of Indian account holders in HSBC Bank, Geneva, forcing the government to opt out from the signing of an international treaty on exchange of financial information.
India's last minute withdrawal from the Multilateral Competent Authority Agreement — which provides for automatic information exchange, starting 2017 — is bound to choke the flow of vital data to tax authorities and hinder attempts to act against unaccounted funds parked in overseas accounts. India can still sign the pact. Currently, it is awaiting clarity from the court.
The list of 627 names provided by HSBC Bank, which also operates in India, does not have any big names connected to political parties or industrialists, government sources said on Wednesday.
The sources were also sceptical about recovery of huge amounts from the 350-odd Indians, who could face prosecution for allegedly stashing black money in foreign banks, as their account entries were too old and reflected relatively small deposits. The rest of the names in the list of 627 are non-resident Indians (NRIs) who cannot be proceeded against under Indian tax laws, they said.
The sources told TOI that most of the bank account entries were much before 2006 and generally were recorded from 1999 to 2004-05. One of the account entries dated to 1973 and is barred under law from being assessed for tax evasion, they said.
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