India has offered amnesty to more than 100 wealthy citizens who evaded taxes by hiding funds in accounts at HSBC Holdings Plc (HSBA)’s Swiss unit, according to a government official with knowledge of the matter.

The income tax department has agreed not to start criminal proceedings or levy a penalty if the Indians repatriate the money from Geneva and pay the taxes, the official said, asking not to be identified because the information is confidential. The official declined to name anyone on the list.

India joins countries including the U.K. and the U.S. in cracking down on rich people who haven’t disclosed offshore funds amid probes into money laundering and tax evasion. A British millionaire was convicted this month for hiding money in HSBC’s Swiss bank in the first case to come before a London court based on data that the U.K. obtained from France in 2010.

The amnesty offer in India is being made to some people who were on a list of 700 citizens with HSBC accounts in Geneva that was given to the South Asian nation’s government by French authorities last year, the official said, without providing additional details. The government is still investigating other people on that list, the person said.

“It’s a pragmatic approach,” said R.K. Gupta, managing director at Taurus Asset Management Ltd., which manages $1 billion in assets. Bringing back money that hasn’t been accounted for is now a “global phenomenon,” he said.

The Central Board of Direct Taxes, which includes the income tax department, was asked to probe whether the 700 account holders had evaded taxes, India’s Sunday Express newspaper reported on Aug. 7, citing finance ministry officials that it didn’t identify. The names of HSBC clients won’t be disclosed until the income tax department begins prosecuting them, the Economic Times reported on Nov. 22, citing Finance Secretary R.S. Gujral.

Anuja Sarangi, a spokeswoman at the Central Board of Direct Taxes in New Delhi, didn’t return three calls to her mobile phone or respond to three e-mails seeking comment yesterday. Laxman Das, chairman of the CBDT, also didn’t respond to an e- mail. Rajesh Joshi, an HSBC spokesman in Mumbai, declined to comment.

“As a general principle, we do not comment on whether individuals are our clients or provide the number of clients of a particular nationality,” Medard Schoenmaeckers, a Zurich- based spokesman for HSBC’s private bank, said by phone.

France obtained data on accounts held at HSBC in Geneva after a bank employee, Herve Falciani, stole information connected to at least 24,000 current and former clients, the London-based lender said in March 2010. Authorities in countries including Italy and the U.K. have since acquired that data and begun investigating whether those clients included people evading taxes or involved in money laundering.

At the time of the data theft more than five years ago by Falciani, HSBC’s Swiss private bank had no more than 1,500 clients in any one country, a Geneva-based official who declined to be named in line with company policy, said in May.

In the U.S., a Wisconsin neurosurgeon was re-indicted in September by a U.S. grand jury on new charges that he failed to declare an HSBC account in India valued in 2009 at $8.7 million. The U.S. crackdown on offshore tax evasion includes criminal tax charges filed by prosecutors against more than three dozen former U.S. clients of UBS AG (UBSN) and Credit Suisse Group AG (CSGN), Switzerland’s two biggest banks, and HSBC.

India loses 14 trillion rupees ($250 billion) from tax evasion every year, depriving it of funds for investment in roads, ports and power, Arun Kumar, author of “The Black Economy in India,” said in July 2011. Based on those estimates, a successful crackdown could more than double the tax revenue for the nation, which collected about 9.3 trillion rupees for the year ended March 31, according to the most recent budget proposal.

The nation’s economic growth slowed to 5.3 percent in the three months through March, the slowest pace in nine years. That slowdown has sapped tax revenue even as subsidies spur spending, leaving India with record borrowing needs to plug the widest budget deficit among the biggest emerging markets. The budget deficit in the two months through May was 27.6 percent of the goal for the fiscal year.

Prime Minister Manmohan Singh began trying to reform the nation’s post-independence tax and regulatory code when he was finance minister in 1991, accelerating tax cuts and reducing the bureaucracy to make the tax system more effective. The top individual income tax rate is now 30 percent, down from 97.5 percent in 1971.

The Supreme Court in July 2011 also ordered a team headed by a judge to take over the government’s efforts to retrieve as much as $500 billion that Indians may have stashed illegally overseas, citing in a 53-page ruling a case where records were found of assets being held by a Swiss bank in Zurich.

HSBC’s Swiss private bank in September 2008 asked clients and independent money managers to surrender their rights to banking secrecy protection. In countries including India, where rules demand investor disclosure, HSBC sought permission to hand over the names of clients that want to keep their overseas investments, the bank said in a letter e-mailed to Bloomberg News in July 2009.

India is also proposing new rules as part of a clampdown on tax avoidance by companies that would go into effect from April 2013. The guidelines, published in New Delhi on June 29, would exempt foreign institutional investors from penalties if they avoid routing money to the country through tax shelters.

The value of illicit Indian assets held abroad was about $462 billion, or 72 percent of the nation’s underground economy, according to a November 2010 report from Global Financial Integrity, a Washington-based research firm that focuses on the cross-border flow of illegal money. India has lost $213 billion in tax collection due to such flows from 1948 to 2008, it said.

The research firm’s estimates for illicit outflows from India, while being useful, “are incomplete and further studies are required,” India’s then-Finance Minister Pranab Mukherjee said in a report titled “White Paper on Black Money” in May.

To contact the reporters on this story: Anto Antony in Mumbai at aantony1@bloomberg.net; George Smith Alexander in Mumbai atgalexander11@bloomberg.net