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For Financial Info, India & US to Ink FACTA Today

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India will on Thursday sign the tough financial information exchange law enacted by the US, which will also give a boost to New Delhi's own attempts to unearth black money stashed away overseas with information inflow beginning as early as October.
The Foreign Account Tax Compliance Act (FATCA) makes it mandatory for all foreign financial institutions to report accounts and financial transaction of US citizens held with them and also accounts of certain foreign entities with substantial US owners. In return, the US will provide India information on investments and financial transactions by its citizens.
The US is expected to start sharing information with India from October 1, a senior finance ministry official told ET. FATCA, which came into force on January 1 this year, was enacted by the US in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act to combat tax evasion by US nationals holding investments in offshore accounts.
India couldn't sign the accord by the December 31 deadline, but had expressed its commitment to the agreement. The Union Cabinet had in March cleared signing of the accord.
The government has already held out the threat of greater information flow from the US to urge people to use the currently open one-time compliance window to come clean under the new black money law.
“India is expected to start receiving information through AEOI (Automatic Exchange of Information) route under FATCA from USA later in the year 2015,“ the finance ministry said in a statement on Monday, detailing the nuances of the Black Money (Undisclosed Foreign Income & Assets) and Imposition of Tax Act, 2015, that came into force on July 1.
The law provides for 120% tax on undisclosed foreign assets and imprisonment of up to 10 years.
The government has provided a threemonth window beginning July 1 for offenders to come clean after paying a tax of 30% and penalty of another 30% on the disclosed assets obtained from unaccounted income. A global agreement to combat tax evasion through sharing of information is to come into force from 2017. As many as 58 jurisdictions will start sharing information under this agreement from 2017 while another 36 will join the global protocol from 2018, boosting India's attempts to uncover black money stashed overseas.
The Economic Times, New Delhi, 9th July 2015

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