The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.


Aditya Bhola ,MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur




Out of more than 11 million leaked documents of Mossack Fonseca, a legal firm operating out of Panama, a tax haven, only 36,000 pertain to Indians — 0.33 per cent of the total. This insignificant number contains the names of 500 Indian entities, some of whom have stated that their names have been misused while some others have denied any wrongdoing. Some officials have also argued that the papers need to be studied to distinguish between the legitimate and the illegitimate. This has given a breather to the entities named in the leaked papers. The general impression is that anyone using the tax havens for their financial affairs has something to hide. The question of legitimacy arises since after 2003 when the Liberalised Remittance Scheme (LRS) was introduced, sending funds abroad for a variety of reasons is not illegal. The amount allowed has varied and at present the limit is $2,50,000. Thus, one could have money in a bank, have a subsidiary, buy shares in foreign companies, etc. The issue remains whether it was legitimately done and if transactions other than the legally allowed ones took place via these instrumentalities. While the names and the year of activity are revealed by the documents, the annual transactions or movements of funds are not known. Thus, even if what has come out in the open was legitimate, what else was done and has not yet been revealed requires investigation. Keeping all this aside we really need to introspect that whether in the name of economic reforms we are giving a leeway to those who want to get away with tax evasion & other illegitimate activities. All this again calls for regulation, proper check & balance on the part of government to keep tab on these activities.


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