The income tax department could soon be able to share information about persons and entities who have stashed illegal money abroad with law enforcement agencies like the Central Bureau of Investigation and the Enforcement Directorate, speeding up the process of prosecuting tax offenders.

Under the existing Double Taxation Avoidance Agreements (DTAA) India has signed with some countries, information received from overseas is confidential and can be used only for tax purposes. Names of offenders can be made public and shared with other agencies only after prosecution. However, the I-T department is insisting on provision in the renegotiated treaties to allow sharing this information with other law enforcement agencies so that concerted efforts would help in prosecuting the offenders.

Said a finance ministry official: ?To start prosecution proceedings against tax offenders, the tax department needed the help of other law enforcement agencies to collect more information about particular persons or entities. However, the confidentiality clause could have prevented us. Sharing information with other agencies would fast-track the process of prosecution.?

Even if treaties allow sharing information with other agencies, it must be done after approval from the foreign tax and tax research division. In some cases; approval from the contracting state would be required, another official said.

Black money parked by Indians abroad has become a major issue of late, with civil society activists, opposition parties and the Supreme Court asking the government to bring it back. To share banking and tax-related information about these offenders, India has amended DTAAs with 40 nations, inserting a clause on the banking sector. In the absence of a clause on banking sector, the contracting countries were not willing to share information. However, after the G20 Summit in Pittsburgh in 2009 and the subsequent meetings of finance ministers of the member countries, all the member countries agreed to amend DTAAs.

The government also plans to revise tax agreements with a host of countries, including Australia and South Africa, and facilitate exchange of banking and other tax-related information with them.

In order to obtain a seamless flow of information on tax and investments made by individuals and institutions, 10 income tax units have been created overseas to assist Indian authorities. Two units at Mauritius and Singapore are already in operational and for the remaining 8, the selection of officers has been made and the approval from MEA is awaited.