The Indian Income Tax department officials were in for a big shock when the ended up seizing a mindboggling US $5 million (About INR28,000 crores) worth of Treasury bonds from a Coimbatore stock broker.
In the above video an expert opinion the True Riskiness of U.S. Treasuries is discussed, while in this instance it has become clear that US bonds can be a double edged sword for Indians, as on the one end they might lose money investing into US bonds, while they actually commit a ‘Criminal Offense’ in holding them in India beyond prescribed limits.
During a routine search based on information of Financial Intelligence in the house and office, the IT sleuths encountered this shocking hoard of US bonds that is unprecedented.
While the US bonds are being verified for their veracity, according to an unnamed Government source, “The bonds seem very much genuine,”.
If true, the amount would be equal to the total amount of black money seized since 2010. As these instruments cannot be converted into rupees or traded in India, the broker’s foreign connections are now being investigated.
According to Indian law, an Indian citizen can hold foreign currency assets of up to $200,000 in all forms but the holding has to be overseas. Any such investment made abroad in movable assets has to be converted into Indian currency on repatriation.
A bond issued by the US Fed can be held by a citizen from a country with convertible currency but India is not one of them. So it is not clear how the foreign bonds were being held by the broker in Coimbatore, sources said.