12.7.15

India, US sign agreement under FATCA

India and the US on Thursday signed a tax information sharing agreement under a new US law, Foreign Account Tax Compliance Act (FATCA), that will bolster efforts towards automatic exchange of financial information between the two nations about tax evaders.
The agreement will cover automatic sharing of information on bank accounts as well as financial products like equities, mutual funds and insurance and is aimed at fighting the menace of black money stashed abroad. Coming within months of India becoming a signatory to the OECD pact on automatic information sharing, the Centre's efforts at getting names of those with illicit wealth stashed abroad will get a leg up.
With the agreement in place, from September 30, banks, mutual funds, insurance, pension and stock-broking firms will report their Indian client details to the United States, which will be shared with authorities here. It was delayed due to observations made by the Supreme Court earlier as in absence of the pact, all remittances to India would have faced a 30% withholding tax, impacting inflows to exporters as well as households.
“We as a country see it as a great breakthrough and significant development in India-US cooperation in handling offshore tax evasion, which also impacts money laundering and other aspects, which we call in India the problem of black money ,“ revenue secretary Shaktikanta Das said. The US has so far signed pacts with 110 tax jurisdictions to implement FATCA.

No comments: