A team of the US Treasury officials recently met Indian Income Tax and CBDT officials for negotiating an Inter-Governmental Agreement (IGA) which will enable faster access to tax evasion related information and tax crimes by individuals and entities of the two countries.
India, since 2009, has a Double Taxation Avoidance Agreement (DTAA) treaty with the US which is also under revision for betterment of protocols.
"The US is a strategic partner when it comes to combating black money and automatic exchange of classified information on tax evasion cases. High-level negotiations are underway to enter into a IGA as stipulated under the Foreign Account Tax Compliance Act (FATCA) of the economic superpower," sources privy to the development told PTI.
The Central Board of Direct Taxes (CBDT), which is the nerve agency of the government in black money cases as it administers the I-T department, recently also began talks on the Mutual Agreement Procedure (MAP) with the US officials.
These talks, sources said, have begun after an interval of more than a year and two rounds of discussions have already been held between the authorities.
"In fact, four important cases under MAP were resolved with the US during this financial year," the sources said.
MAP is an alternative available to taxpayers for solving disputes giving rise to double taxation, whether judicial or financial. The MAP procedures are also listed in the DTAA protocol.
Apart from India, the US is also talking to over 50 countries and jurisdictions across the globe to enhance international tax compliance and to implement information reporting and withholding tax provisions in its country, known as the FATCA.
The IMG is the precursor to such an agreement.
The FATCA, created in 2010, is aimed ato targeting non-compliance by US taxpayers using foreign accounts.
The sources said US and India are negotiating the IMG as both the countries have a number of potential cases of offshore tax evasion in their classified dossiers and once the deal is done the lists would be exchanged.
"The maximum cooperation that India had on issues related to overseas tax evasion and criminal cases has been with the US. A number of meetings have taken place in the last one year and positive results are expected soon," the sources said.
India, as part of its drive against illegal foreign stash funds and to ensure tax compliance, has signed 91 DTAAs and 16 Tax Information Exchange Agreements (TIEAs) till now.
Both India and US are also signatories to the Organisation for Economic Cooperation and Development (OECD), a global body which frames economic policies and protocols to combat black money instances.