Tax officials are now asking these rich Indians to expalin why their names have figured in these insurance policies that run into millions of dollars.
The report, citing two people familiar with the development, said summons have been issued under section 131 of the Income Tax Act, which allows tax authorities to conduct enquiries.
Also Read
The FA schedule mandates that resident Indians disclose details of their foreign policies to tax authorities even if they may not have purchased them (a relative may have purched the policy for them) but are named in those policies.
At present, the tax official told ET, the probe is focused on ascertaining whether this was negligence or deliberate. "Based on the investigation, cases could also be referred under the black money Act provided it is above the permissible threshold,” the official added.
The Foreign Exchange Management Act (Fema) is triggered when life insurance is bought from a foreign company without approval from the RBI.
After getting the central bank's approval, a person can buy such a policy by transferring the premium amount using RBI's liberalised remittance scheme. The LRS allows a resident to invest up to $250,000 a year in stocks, bonds, properties and debt mutual funds.
The I-T department received its third tranche of information as part of the annual automatic information exchange arrangement with various countries in October 2022.
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app