Government has approached 65 countries, including Switzerland and tax haven nations, to revise a tax information exchange treaty with them to include fresh details while sharing bank-related information of individuals and other entities.
The Finance Ministry has initiated the move under the existing Double Taxation Avoidance Agreement (DTAA) as Indian tax authorities are looking to curb illegal stashing of money by individuals and others in foreign shores.Online GST Certification Course by TaxGuru & MSME- Click here to Join
According to top sources in the Foreign Taxation division of the Finance Ministry, the government is revising DTAAs to “specifically” provide bank-related information, especially in certain “specific cases”.
“The bank-related data will enable Indian authorities to check tax evasion and illegal stashing of money in foreign shores by individuals and some other entities. The details on bank-related information is not properly addressed in the present DTAA,” a senior Finance Ministry officer said.
Under the present tax avoidance treaty, the “Union government may enter into an agreement with the government of any country outside India for exchange of information for prevention of evasion or avoidance of income-tax chargeable under this Act (Income Tax Act) or under the corresponding law in force in that country, or investigation of cases of such evasion or avoidance, or for recovery of income-tax under this Act and under the corresponding law in force in that country.”
Government is also in the process of setting up overseas tax units in countries like France, UAE, USA, Britain, Netherlands, Japan, Cyprus and Germany. Two such units in Mauritius and Singapore have already become operational.
Currently, Government has DTAA agreement with 65 countries.