In a major move against black money stashed away abroad, the union cabinet on Thursday approved the signing and ratification of an agreement between India and Seychelles for exchanging information on tax issues.
"The government is fully committed to tackle black money. This is a very important agreement with Seychelles for the exchange of information in this regard," Communications and Information Technology Minister Ravi Shankar Prasad said, briefing reporters after a cabinet meeting chaired by Prime Minister Narendra Modi.
"Information received under the agreement shall be treated as confidential and may be disclosed only to persons or authorities (including courts or administrative bodies) concerned with assessment, collection, enforcement, prosecution or determination of appeals, in relation to taxes covered under the agreement," an official statement said.
Last month, India and the US signed an inter-governmental agreement to implement the Foreign Account Tax Compliance Act (FATCA) towards greater transparency between the two countries on tax matters.
As per this inter-governmental agreement under a new US law, Indian financial institutions would have to reveal information about US taxpayers to the revenue department which would be passed on to the US tax authorities.
In turn, the US will also share financial information with India.
"It reaffirms the government of India's commitment to fight the menace of black money. It is hoped that the exchange of information on automatic basis regarding offshore accounts under the FATCA would deter tax offenders, enhance tax transparency and eventually bring in higher equity into the direct tax regime," Revenue Secretary Shaktikanta Das, who signed the agreement on India's behalf, said on the occasion.
Last November, in Australia, India and the other G20 countries agreed to automatically exchanging tax information on a reciprocal basis by the end of 2018.
