A harsh black money law is believed to have triggered an exodus of several wealthy Indians to destinations like Dubai and Singapore, according to an informal email and text messages exchanged by traders in Mumbai’s financial markets on Tuesday. A leading tax professional said that many of these people with undisclosed offshore bank accounts are exploiting loopholes in tax and foreign exchange laws.
reporterUsing their contacts they are arranging job appointment letters from companies in countries like the UAE and Singapore. While the employers and companies do exist, the persons receiving the letters have no intention to join the firms as employees. Instead the job offer letters would be used to claim residency status in the respective countries.According to FEMA, Indian citizens employed abroad are considered nonresidents; while according to the income tax law, such persons are required to stay out of India for at least 182 days in a financial year to claim non-resident status.A non-resident Indian does not have to disclose foreign assets to Indian tax authorities. According to text messages circulating, 80,000 Indians have applied for residency certificate in Dubai and some of the other countries