MUMBAI: A US passport doesn’t look like such a priced possession anymore. Some Indians even want to surrender their hard-won green cards. India and the US are set to freely exchange financial information about their citizens, leaving no asset concealed. This could mean US tax officials imposing punitive levies on undisclosed cash and property in India.And for those who think the Indian tax authorities are a tenacious lot, they ain’t seen nothin’ yet, namely the US Internal Revenue Service in action.A well-known south Mumbai socialite is planning to become an Indian citizen, with the government having signed up to the US Foreign Account Tax Compliance Act (Fatca). Others are shutting old bank accounts to hide financial trails and ‘gifting’ assets in India to husbands, wives or children.For years, US citizenship was one way of saving on tax, while for others it was a point of vanity. It also meant convenience as many countries don’t require US passport holders to get visas. “For one retired actor who now lives in Mumbai, the reason to take up US citizenship was that he could travel in the EU without a visa,” said a tax expert.The exchange of information under Fatca includes bank accounts besides holdings of real estate and other assets. Apart from penalties, jail time could also be involved. “Until now, many Indians who were American citizens would seldom reveal their Indian income and investments in the US and vice versa. However, now when that information is shared by India in the US, it could attract a lot of penalty and even some other punitive action, this has led to many NRIs (non-resident Indians) moving back to India,” said Lloyd Pinto, director, Grant Thornton India. Businessmen and celebrities are looking for ways out of the imbroglio.“A number of people residing in India have green cards or retained their American passports for snob value but under Fatca, they have to declare all their assets held worldwide in the US,” said Jeenendra Bhandari, partner at tax and audit firm MGB and Co LLP, who is advising clients on the matter.They have three options, said Bhandari, a chartered accountant who’s also licensed in the US as a certified public accountant. They can declare the assets and if they’ve missed the deadline for this, pay penalties. They can also restructure their holdings. “The third option is to take up Indian citizenship and renounce the American one.”Those opting for the last are mostly who took US citizenship to save tax in India. But for many NRIs, transferring assets is problematic. “There are a lot of complications while transferring a property to your kin. First is paying the stamp duty and apart from that it could also trigger some Indian tax in future,” said another tax expert who is advising a businessman in this regard.Transferring assets is also not the most-favoured route for another reason. It puts the individual at the mercy of relatives, said tax experts.Switching passports isn’t easy. Under US law, those renouncing citizenship have to get clearance from the revenue authorities. Some have started the formalities at US missions in the country.“The only flaw with this is that it would take a year before they get an Indian passport, and they can’t leave the country (in the meantime),” said the tax expert cited above.Many tax experts are telling NRIs to declare their assets, if the pain is relatively mild. But in some instances, the penalties could exceed 100 per cent under US tax laws, said the experts. The key sticking point is that US authorities will calculate tax on the maximum bank balance held in the last six months.Some NRIs are closing accounts, becoming Indian citizens and opening new ones. “So if you go to the US, say two years from now, it would be tough for the authorities there to prove if you are the same person,” said the expert. That presumes lack of coordination among revenue authorities, security agencies and immigration.