Government issues Clarification on Increasing Deposit of Indians in Swiss Banks
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The Ministry of Finance has issued a clear explanation about recent media reports that claimed Indian entities are increasing their deposits in Swiss bank accounts. The government clarified that this situation is being closely monitored, and strong steps are being taken to prevent tax evasion through foreign bank accounts.
In 2024, the amount of money belonging to Indians in Swiss banks has increased three times compared to the previous year. It reached 3.5 billion Swiss francs, which is around ₹37,600 crore, according to the annual data released by the Swiss National Bank (SNB). India climbed to 48th place globally in terms of total client funds in Swiss banks, up from 67th in 2023, though slightly below its 46th position in 2022. [Read Report]
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What the Finance Ministry Said
The Finance Ministry said that India has been getting detailed financial account information from Switzerland every year since 2018. This is made possible through an international system called the Automatic Exchange of Information (AEOI). The first set of this data was received in September 2019.
This system allows countries to share financial information with each other to stop people from hiding money in foreign accounts to avoid paying taxes. The shared data also includes details of bank accounts that are under suspicion for illegal or irregular activities.
How the Government Uses the Information
The Central Board of Direct Taxes (CBDT), which looks after income tax matters in India, carefully checks the information it receives from Switzerland and other countries. The board matches this foreign data with the income tax returns (ITRs) filed by Indian taxpayers.
If any mismatch is found—especially if foreign assets or income are not reported correctly—the CBDT investigates further. These checks can be done through different ways like:
- Search and survey operations
- Sending notices
- Asking for clarification through open enquiries
For the Assessment Year 2024-25, the CBDT specifically compared the AEOI data with the foreign income and assets declared by taxpayers in their ITRs. In cases where information was missing or not properly declared, the government sent SMS and emails to those taxpayers, asking them to review and correct their tax returns.
Because of this effort:
- 24,678 taxpayers reviewed their ITRs
- 5,483 people filed belated (late) returns, disclosing:
- Foreign assets worth ₹29,208 crore
- Additional foreign income of ₹1,089.88 crore
The government is also thinking about taking legal action against those who received notices but did not respond or make corrections.
Significant Increase in Compliance
This initiative has led to a major improvement in tax compliance. For the assessment year 2024-25:
- 2.31 lakh taxpayers reported foreign assets and income
- This is a 45.17% increase compared to 1.59 lakh taxpayers in the previous year (2023-24)
The Ministry said that this increase in compliance shows that more people are becoming aware of their responsibilities and the consequences of hiding foreign income. The government also credited its data-based monitoring and enforcement strategies for this positive change.
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The Ministry reassured that it is fully committed to taking strict action under Indian laws against anyone who tries to hide money abroad and avoid taxes.
It also confirmed that Switzerland has been sharing account information every year since 2018, and this data includes even those accounts suspected of illegal activities.