Surprising though it may appear, a US passport doesn't appear like such a priced possession any longer. As per some reports, there is no dearth of Indians who are even are keen to give up their hard-won residency status.
India and the US are set to freely swap financial details related to their citizens, in the process, leaving no asset really hidden. It could signify US tax officials inflicting penalizing taxes on unrevealed money and possessions in India.
And for those who believe the Indian tax officials are a determined lot, they have not seen anything still, to be precise the US Internal Revenue Service in action.
A renowned socialite from south Mumbai is reportedly planning to become an Indian citizen, with the administration having signed up to the US Foreign Account Tax Compliance Act (Fatca). Many others are closing old bank accounts to conceal monetary trails and 'gifting' belongings in India to husbands, partners or kids.
For several years, US citizenship was one method of saving on tax, while for many others; it was a point of pride. The same also indicated handiness as numerous nations don't need US passport holders to receive permits. As per a tax specialist, for one retired artist who presently stays in Mumbai, the key factor to take up the US citizenship was that he could take a trip in the European Union (EU), minus a permit.
The exchange of facts under Fatca comprises bank accounts, apart from holdings of landed property and extra assets. Aside from penalties, jail time may also be a part of the deal. Hitherto, several Indians who had US Citizenship would hardly ever disclose their Indian earnings & investments in America and vice versa.
As per another concerned person, now when that information is duly shared by India in the US, it may draw a great deal of punishment and even some other punitive action, and the same has resulted in several many NRIs (non-resident Indians) shifting back to India. Businesspeople and famous persons are exploring ways out of the entanglement.
Throwing more light on the development, another concerned person reportedly stated that numerous people staying in India possess Green Cards or retained their US passports for snob worth. However, under Fatca, they have to make public all their possessions held internationally in the US.
According to a Chartered Accountant who is also licensed in America as a skilled public accountant, they have three choices--they can declare the assets, and in case they have missed the time limit for the same, give penalties. They can also restructure their holdings. The third alternative is to adopt Indian citizenship only to give up their US citizenship.
Those using the last are more often than not who received the US Citizenship to save tax in India. But for several NRIs, transferring possessions is rather challenging.