The union cabinet on Wednesday approved signing and ratification of protocol between India and Japan for amending the Double Taxation Avoidance Convention (DTAC).
An official release said DTAC was signed between the two countries in 1989 for avoidance of double taxation and for prevention of fiscal evasion through a protocol.
The cabinet meeting was chaired by Prime Minister Narendra Modi.
The release said the protocol will facilitate exchange of information, as per accepted international standards, on tax matters including bank information.
"There is a provision in the protocol for sharing any information received from Japan, with authorization of the competent authority in Japan and vice versa, in respect of a resident of India with other law enforcement agencies," the release said.
"The protocol also has a provision for India and Japan to lend assistance to each other in collection of revenue claims, as well as for exemption of interest income from taxation in the source country, with respect to debt-claims insured by the government or government-owned financial institutions," it added.
