However, most claim NRI status, which means they cannot be implicated for flouting Indian investment and income tax norms.
Deeper investigation into the Panama Papers by The Indian Express has revealed that many Indians named in the leaked documents of the Panamanian-based law firm Mossack Fonseca discovered the advantages of having a company in tax haven countries before the Reserve Bank of India made it possible for citizens to take their money abroad.
Investigations into the nearly 11 million leaked papers -- Indian Express says that there are about 37,000 documents related to India -- reveal that many Indians set up offshore companies in Panama, a tax haven in the 1990s and early 2000s. The new information says that at least 20 Indians, and the number could go higher as investigations continue says Indian Express, set up entities in Panama before it was permissible by the law.
Indian Express is the only Indian publication partnering with the International Consortium of Investigative Journalists (ICIJ), who distributed all the 11 million documents among its 100 media members. Only about 300 journalists across the world have access to the Panama Papers that have now named and shamed many prominent personalities across the world, including celebrities, politicians, industrialists, businessmen and even the common man.
In February 2004, RBI introduced the Liberalised Remittance Scheme, under which a resident Indian could take out or send $25,000 abroad every year by way of a gift, a donation or medical expenses. This amount could also be spent on children's education or be spent to buy shares. Since then, money allowed to be remitted under the LRS has been hiked to $2,50,000 a year.
However, many named in the new report also claimed that they were non-resident Indians, which means that the aforementioned rules would not apply to them. NRIs are not entitled to adhere to investment norms of the country and will only have to report an income if it comes from Indian
According to a report by The Indian Express, many Indians chose to set up companies offshore because it was possible to buy them "off the shelf" for a few dollars -- it was possible to set up a company with a capital of $1 with the help of Mossack Fonseca. All this was possible because there was a serious lack of strict rules.
The report mentions a Darab Dubhash who set up an offshore company in the British Virgin Islands 18 years ago but said that he has been a NRI for 20 years now. Many others, from a metal scrap dealer to merchants, officers and businessmen named in this Indian Express report have said that either their name was misused or that they have been NRIs for over 20 years.
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