NEW DELHI: In an attempt to unearth black money stashed abroad, India and the US on Thursday signed an agreement to implement FATCA that will facilitate exchange of information between the two countries from October 1.
The Foreign Account Tax Compliance Act (FATCA) was signed by Revenue Secretary Shaktikanta Das and the US Ambassador Richard Verma to promote transparency between the two nations on tax matters. “FATCA is a mutual effort to combat tax evasion and it would be beneficial for both the countries,” Verma said.
Shaktikanta Das said, “We reassured the US government of the binding commitment to fight the menace of evasion and bring transparency in the matters of payment of taxes which are legitimately due to the government.”
FATCA is rapidly becoming the global standard in the effort to curtail offshore tax evasion.
FATCA seeks to facilitate flow of financial information between countries. Under the inter-governmental agreement, Indian financial institutions would have to reveal information about US tax payers to the revenue department which would be passed on to the US tax authorities. Under the pact, US will also share with India financial information.