Wealthy Indians under scanner over foreign Life Insurance Policies

Many rich Indians, some belonging to the community of diamantaires, are under probe by the income tax department for holding foreign life insurance policies running into millions of dollars. Most of these individuals either did not disclose that they were nominees in foreign life policies or were found to have purchased life insurance from an offshore company without the permission of the Reserve Bank of India.

Summons were served under section 131 of the Income Tax Act which empowers the tax authorities to conduct enquiries, two persons familiar with the development told.

According to a tax official, the enquiries are based on specific information, and assesses have been asked to explain why they have failed to disclose it in the foreign assets (FA) schedule of the I-T returns as mandated under the law.