Indians Abroad giving up Indian addresses to escape scrutiny by tax authorities.



In the past few years, hundreds of non-resident Indians (NRIs) have been either summoned or served notices by the Income Tax (I-T) Department and Enforcement Directorate (ED) — sparking fear and unease among many in the diaspora who were asked to explain assets and earnings for certain years.

Now, many have found a ploy to escape the glare of the Indian authorities and avoid the trouble that follows. It’s simple: they are changing the Indian addresses mentioned in their passports to the ..

A large number of individuals named in the Paradise and Panama papers happen to be NRIs.

The new address is recorded in their documents with overseas banks where they have the accounts — either in the names of family members or, companies and offshore trusts. Banks are the prime source of information on fund movements and assets for the Indian government.

However, this source can dry up with the change in address. Overseas banks do not share information on their ‘tax residents’ with authorities in other countries.

As long as the account holder’s address in a bank’s records is a local one, the bank passes on information only to the government of that country (and not India).


It’s a loophole in the systematic information sharing arrangements that countries struck with each other to access data on undisclosed assets and produce evidence of tax evasion.

Resident Indians pay tax in India on their earnings at home as well as abroad, but the tax NRIs pay to the Indian government is only on their income in India.

“If an NRI is paying tax in a particular country, he or she is in a position to change the address in the passport to the present address in the foreign country. He is recognised as a tax resident of that country. This interrupts any exchange of information under Common Reporting Standard-…Many NRIs, I believe, have done this to avoid the inconvenience of responding to the I-T and other departments,” said senior chartered accountant TP Ostwal.

As per changes in international tax legislations, financial institutions worldwide are required to report customers’ account information based on tax residence to the local tax authorities where the financials accounts are held.

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