Diamond merchant Nirav Modi. (Source: Nirav Modi/Instagram)

CBDT Forms Committee To Study Cases Of High Networth Individuals Fleeing India

The Central Board of Direct Taxes has formed a committee to study cases of high-income individuals like Nirav Modi and Vijay Mallya fleeing the country and prepare an action plan for how to make them pay their dues.

A five-member working group, led by a joint secretary-rank officer of the Union Finance Ministry, has been tasked to go into the "taxation aspects" of such high-net-worth individuals, according to CBDT’s order accessed by PTI. The group will “formulate India's position for various aspects related to taxation of migrating HNWIs” and has been created on the directions of CBDT Chairman Sushil Chandra.

Such ultra-rich people, the order said, pose a “substantial tax risk” as they may treat themselves as non-residents in matters of taxation. The group will also make recommendations for “policy decision in respect of tax risks of the migrating HNIW population”.

The committee has been empowered by the CBDT to hold consultations with various wings of the income tax department such as investigations, foreign taxation, and tax deducted at source, so that a comprehensive policy is put in place.

A senior official said the group was created keeping in mind recent cases of high-income people such as diamantaire Nirav Modi, his uncle and Gitanjali Gems Ltd. promoter Mehul Choksi and liquor baron Vijay Mallya.

To get fleeing ultra-rich citizens back into the country by way of deportation or extradition, freezing their assets and realising taxes is a difficult task, a senior government official told PTI.

Cases of Modi, Choksi and Mallya are being probed by multiple investigative agencies on charges of corruption and default of bank loans, money laundering and tax evasion. The official said there are few more cases like these which the agencies are also probing.