Speaking to reporters during his London visit, Finance Minister Pranab Mukherjee said last evening that the new tax treaty to help India get the account details of Indians having black money in Swiss banks might come into force by 2011-end.
Back in New Delhi, Swiss Ambassador to India Philippe Welti was more specific and said he was hopeful of all the formalities from Switzerland's side being completed by October 6 with regard to the new treaty.
Welti told PTI in an interview that he was very optimistic about Switzerland informing the Indian government after October 7 about its readiness to exchange information.
The issue of black money stashed away by Indians in safe havens abroad, including in Swiss banks, is being widely debated in India and the recent months have seen a growing judicial scrutiny and political outcry over the matter.
The level of secrecy has somehow lessened recently with a disclosure by the Switzerland's central bank, the Swiss National Bank (SNB) that the total deposits of Indians in various Swiss banks stood at USD 2.5 billion as on 2010-end.
While this is the first-ever official disclosure of money held by Indians -- both individuals and institutions -- in Swiss banks, insiders say that the actual wealth held directly and indirectly by Indians there could be much more.
Amid a raging debate on Indians having allegedly stashed away billions of dollars in Swiss banks, the two countries in August last year signed an agreement to revise their Double Taxation Avoidance Agreement.
If it comes into force this year, the revised treaty would allow India to seek secret bank account details from Switzerland with effect from January 1, 2011 itself.
Speaking to newsmen At India House in London last evening, Mukherjee said: "We signed a protocol amending the existing Double Taxation Avoidance Agreement with Switzerland last August. As per their law and Constitution, their international agreements should be ratified by both houses of Parliament and local authorities.
"The ratification by the two houses are over. The ratification by local authorities may be over by the end of this year".
The revised DTAA was approved by Switzerland's Parliament on June 17. After ratification by Parliament, the treaty is open to scrutiny by Swiss people for 100 days, which ends on October 6. If there is an opposition to the agreement, then the same would be subject to a national referendum.
However, the Swiss Ambassador said he was hopeful the treaty would be approved without a national referendum.
"By October, it will be clear whether we will have a referendum or not... I have a strong feeling that by October 6, we will be able to say that there will be no referendum.
"... My feelings tell me that there will be no need for a referendum... If I am proven right, it means that after October 7 (this year) we will inform the Indian government that we (Swiss government) are ready for exchange of information," Welti said.
Asked when banking information can be sought from Switzerland, Welti said that assuming the DTAA is ratified before the end of this year, "Indian government has a slight advantage".
"... they (Indian government) can file requests which concern revenues that have been generated from January 1, 2011 since our financial year starts earlier," he pointed out.
India can seek bank account details for cases dating from January 1, 2011, provided the treaty coming into effect this year, the Swiss ambassador noted.
In Switzerland, the financial starts from January 1.
Once in force, the treaty would allow India to seek information for cases related to tax evasion also.
Under the existing treaty with Switzerland, India could only seek bank information related to tax fraud cases.
Welti said requirements for asking bank information has been relaxed by Switzerland.
"Switzerland in the past had the reputation of being very strict in terms of acceptability of documents.
"From the technical point of view, it has now become easier to file requests because Swiss government has relaxed technical requirements for requests," Welti noted.
However, there are already concerns about a possible flight of Indians' money from Swiss banks to other safe locations such as Dubai, Singapore and Mauritius on fears of a growing scrutiny.
As per the official SNB figures, the money of Indians' with Swiss bank has declined by about half a billion dollars since 2008, when the amount was close to USD 3 billion.
Over the years, various figures have been floating on the estimated wealth of Indians in Swiss banks, with one being as high as USD 1.5 trillion.
A private banker in Geneva, however, recently said that both the SNB's figure of USD 2.5 billion dollar and the unconfirmed estimate of USD 1.5 trillion could be grossly wrong and the real figure could be between USD 15-20 billion.
