Income Tax Department: The Foreign Asset Investigation Unit (FAIU) of the Income Tax (I-T) Department is purportedly inquiring about undisclosed assets abroad and has reportedly sent notices to local businesses, including some listed organisations. According to a report by the Economic Times (ET), FAIU’s effort to find black money was formerly restricted to individuals exclusively, but has since expanded to include businesses.
At least eight Mumbai-based companies have received notifications from the intelligence service requesting information on their directors. Prior to now, FAIU’s investigations were restricted to residents’ concealed assets, such as their bank accounts and stock holdings in overseas corporations and trusts.
“But now, the FAIU is enquiring into payments by Indian companies to overseas persons and entities. Probably, they may have found cases where there were reasons to believe that the foreign recipients of the money were just intermediaries,” a senior tax practitioner told ET.
Another tax expert stated that although the Enforcement Directorate (ED) typically monitors such transactions, it is now unknown exactly what the FAIU will look into. According to reports, the Black Money Act would be used to examine the instances.
The authorities have the right to inquire about assets that were obtained decades ago but have only been uncovered under the Black Money Act’s new regulations, which went into effect in 2015. The Black Money Act permits the authorities to look into the acquisition, unlike the I-T Act, which only permits them to claim the tax due on an undeclared asset.
In 2020, FAIUs were established in each of the tax department’s 14 investigating directorates. They were in charge of looking into incidents of global data leaks like the Panama Papers.