Notices are also being sent to some foreign of the account holders using the information received under US Foreign Account Tax Compliance Act (FATCA).
Indians holding undeclared assets in the island country of Singapore could face strict action including penalty and even prosecution, according to an Economic Times report.
The report stated the two countries are sharing financial data for such undisclosed assets between 2008-2017 with each other as a part of the revised double taxation avoidance agreement (DTAA).
Those with such undisclosed assets were given a chance to do so under provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
The foreign income or the size of the undisclosed assets will decide the ultimate penalty to be faced by the defaulters.
The defaulters may have to pay taxes and penalties up to three times the tax computed, and as much as seven years in jail.
India and Singapore signed the DTAA in 2005, which was giving a tax exemption on capital gains in India to residents in the Southeast Asian country.
According to the report, India’s treaties with Mauritius, Cyprus and Singapore were being abused by persons looking to stash black money in offshore accounts and other assets.
These treaties faced a revision and have also seen an information exchange that had improved between the three.
The Indian tax authorities are also taking action against persons with the offshore accounts. The report stated notices are being sent to some foreign of the account holders using the information received under US Foreign Account Tax Compliance Act (FATCA).