Foreign Asset Investigation Unit (FAIU)

Foreign Asset Investigation Unit (FAIU)

Subject: Economy

Section: Fiscal Policy

Context:

The Government’s probe team, supervised by a Multi Agency Group (MAG), has started action first on offshore trust-owning individuals and companies named in Pandora Papers.

THE INCOME Tax Department and its newly created Foreign Asset Investigation Unit (FAIU) have conducted two major search operations this month that officials said were linked to the global media leak.

Law? 

Indians are required to declare any association with an offshore trust — be it as a Settlor, Trustee or Beneficiary — in the Foreign Asset (FA) declaration section of their Income Tax returns. If they fail to do so, they are liable for stiff penalties and fines under the 2015 Black Money Act.

Foreign Asset Investigation Unit 

• The Foreign Asset Investigation Units (FAIUs) have been created in all the 14 investigation directorates of the tax department located in various parts of the country that are primarily tasked to undertake raids and seizures, and develop intelligence to check tax evasion done by various methods.
• It would  focus on cases of undisclosed assets held abroad by Indians and black money stashed abroad. The new units will also probe cases of Indian entities named in global tax document leaks like the Panama Papers.
• The FAIUs are slated to function under the unified command of an officer in the rank of director-general of income tax. Further the pursuit of data analysis and initiating credible actions on the basis of these analyses would be the major function of the FAIUs.
• The FAIUs are under the authority of the jurisdictional director general of income tax (investigation) rank officer and its work is directly monitored by the Central Board of Direct Taxes.