Chandigarh, October 5, 2026 (Yes Punjab News)
Taking a cue from China’s latest drive to track down wealth concealed by its citizens in offshore trusts, mostly in well-known tax havens, and the income accruing from it, former Special Chief Secretary of Punjab KBS Sidhu has written to Union Finance Minister Nirmala Sitharaman.
He points out that India has recovered less than one per cent of the tax demanded under the Black Money Act, 2015, and proposes three measures to close the gap.
Citing the Government’s own replies in Parliament, KBS Sidhu notes that demands of ₹35,104 crore, including penalties, were raised under the Act between July 2015 and March 2025, against which only about ₹338 crore was recovered.
In the Panama and Paradise Papers, undisclosed credits of ₹20,353 crore were detected against 930 India-linked entities, while tax collected stood at ₹153.88 crore as of October 2021.
“Detection is no longer the constraint. Recovery is,” KBS Sidhu said. “India has received financial account information from over a hundred jurisdictions since 2017, and Swiss account data since 2019. The data is already in the Government’s hands. What is missing is an identified team charged with converting it into revenue.”
The letter comes as China’s ninety-day window closes on October 22. By then its residents must declare and pay 20 per cent income tax on assets placed in offshore trusts, and on the income those trusts earn, with liabilities reaching back to January 2023. Beijing has set up dedicated teams of tax officials, inspection experts and regulators, some of them assigned to a single billionaire.
“India need not, and should not, borrow China’s coercion,” KBS Sidhu said. “The administrative lesson holds all the same. Data yields revenue only when someone is made responsible for collecting it.”
In his letter, KBS Sidhu, who served as Principal Secretary (Finance), Punjab, from 2010 to 2012, proposes three measures within the Department of Revenue’s existing powers.
First, he proposes a joint Foreign Assets Recovery Cell comprising the Central Board of Direct Taxes (CBDT), Enforcement Directorate and Financial Intelligence Unit (FIU-IND), supported by forensic accountants, with named officers owning the highest-value cases from detection to recovery.
Second, Sidhu suggests an annual statement to Parliament from both the CBDT and the ED showing amounts actually collected and assets actually repatriated from abroad, alongside demands raised and attachments made.
Third, he proposes a pilot with two or three jurisdictions on recovering Indian tax abroad through the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and the collection provisions of India’s tax treaties, which, according to him, have so far been used mainly to exchange information.
None of these steps needs new legislation, he notes, adding that the first two could be announced in the Union Budget for 2027–28.
KBS Sidhu also distinguishes between tax and assets. The Black Money Act taxes undisclosed foreign income, while the ED’s powers under money-laundering and foreign-exchange laws reach the asset itself.
The ED’s annual report for 2025–26 records attachments of ₹81,422 crore and restitution of ₹63,142 crore. These arise largely from domestic cases, however, and no figure is published for foreign assets actually brought home.
He contrasts this with the United States, which taxes its citizens and green-card holders on worldwide income and enforces strict reporting of foreign accounts. Its offshore voluntary disclosure programme brought more than 56,000 taxpayers into compliance and recovered over $11 billion.
KBS Sidhu has set out the argument in detail in his article “Eyes Wide Shut on Offshore Trusts”, published in The KBS Chronicle.
A 1984-batch IAS officer of the Punjab cadre, KBS Sidhu superannuated in July 2021 as Special Chief Secretary, Government of Punjab. He served as Principal Secretary (Finance), Punjab, from 2010 to 2012 and is Founder-Editor of The KBS Chronicle.
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