Mr Narshibhai, who hailed from Krishnanagar Naroda Road, Ahmedabad, emigrated to Kuwait to work in the oilfields of Mina Al-Ahmadi, Kuwait. He had been in Kuwait for quite some time and was earning a decent salary. So, Narshibhai chose to buy an insurance policy in India and started sending money back home to his family. However, he got into trouble with the Indian Income Tax Department when they sent him an unexplained tax notice.
Even though Narshibhai’s salary is deposited in the National Bank of Kuwait, he remitted the money back to his ICICI and HDFC Bank accounts (NRE and NRO accounts). According to Indian tax laws, every bank has to file a Specified Financial Transactions (SFT) statement with the Income Tax Department. Through the SFT/Insight system, the tax department got wind of Narshibhai’s considerable financial holdings in India, for which the department thought he had failed to pay due tax.
