The government has approached 65 countries, including Switzerland, to revise a tax information exchange treaty for incorporating 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 Agreements (DTAAs), as Indian tax authorities are looking to curb illegal stashing of money by individuals and entities on foreign shores.
According to top sources in the foreign taxation division of the finance ministry, the government is revising DTAAs to “specifically” provide for information on 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 on foreign shores by individuals and some other entities. The details on bank-related information is not properly addressed in present DTAAs,” a senior finance ministry official said.
Under the present tax avoidance treaties, the “Union government may enter into an agreement with the government of any country outside India for the exchange of information to prevent 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.”
The government is also in the process of setting up overseas tax units in countries like France, UAE, USA, Britain, the Netherlands, Japan, Cyprus and Germany. Two such units in Mauritius and Singapore have already become operational.
At present, the government has DTAA agreements with 65 countries.
