The CBDT has constituted a high- level committee to secure confidential tax data, obtained under mutual exchange with US authorities, as part of India's compliance measures for signing the much awaited Foreign Account Tax Compliance Act (FATCA).
The seven-member panel will be headed by the Member (Income Tax) of the Central Board of Direct Taxes who is a Special Secretary-rank in the Finance Ministry.
Other members include two Joint Secretary-rank officers handling sensitive foreign exchange tax information and policy matters and four Commissioners of Income Tax dealing in investigation and intelligence subjects of the I-T department.
"The panel, called Information Security Committee (ISC), is part of necessary compliance norms required to be in place mandatorily before India signs the FATCA in a full-fledged manner with the US," a senior official told PTI.
"The ambitious agreement between the two countries is very important and the most important tool to combat black money cases," he said.
Under FATCA, US government has Inter-governmental Agreement (IGA) for sharing of information with various countries where American individuals and companies have accounts and other assets.
Under the pact, the exchange of information between the countries will be subject to a confidentiality clause.
Also, overseas financial institutions need to provide details about accounts held by Americans or foreign entities where the US taxpayers hold a substantial ownership interest, as also about all major transactions.
If a financial institution does not comply to FATCA, it would have to pay 30 per cent penalty tax on all its US revenues, including dividend, interest, fees and sales.
The committee, according to the Terms of Reference (ToR) issued by the CBDT, will "ratify information, security policies and procedures" with regard to the dealing of a tax case in the I-T department and CBDT.
"Once an information is shared under FATCA about an entity, its confidentiality is the most important virtue as the data obtained under exchange will travel under different verticals in the board and the department.
The Committee, will hence ensure that accountability and responsibilities are fixed at each stage of a case under exchange or probe and see that no breach occurs while handling of this secret data," sources said.
CBDT, the apex policy making body of the Income Tax department, by way of ISC has also brought together all its business and e-data heads on one platform for seamless and sabotage-proof information ranging from the PAN database to the Income Tax Returns of an entity whose case is exchanged under FATCA.
