Following the agreement signed between India and US on implementation of (FATCA), non-resident Indians in US have started selling off their assets by transferring them under family trusts.
The reason why NRIs in the US transfer their properties to trusts is to absolve them from the responsibility to pay taxes on such transactions, as trust beneficiaries are not liable to pay taxes if they have been appropriately structured.
Indian families have been sending one of their heirs to either Europe (under Inheritance Tax) or the US (under FATCA) with the intent to evade paying taxes in India. The tax queries however kept steadily increasing from both the US and Europe to get a better understanding of the wealth levels these families own.
Also with data from Switzerland and Panama Leaks, Indian tax authorities are getting a step ahead in catching such tax evading families. With the noose of tax authorities tightening around such practices, more than 4000 non-resident Indians have given up their citizenship in the past two years according to government sources.
US has also started sharing data of NRIs mutual fund and stock market related transactions with India from last year onwards.
Source: Economic Times