India has sent the first set of information about Americans holding financial assets in India to the US revenue authorities after setting in motion an information-sharing deal to tackle offshore tax evasion from September 30.
Sources privy to the development said that Indian asset details of Americans were collected by the tax department from all banks in India and shared with the US Internal Revenue Service (IRS) under an inter-governmental agreement signed on July 9 under the US’ Foreign Account Tax Compliance Act (FATCA). India is expected to get similar information about the financial assets Indians have in the US. The move is part of an effort of tax authorities to collect information about assets held abroad by people that would help in accurately assessing their taxable income.
Under the agreement, insurance, banking, pension and stock broking firms in India will report their US client details to the income tax department for eventual sharing with the IRS. The idea is to capture details of US taxpayers’ unreported foreign financial accounts, stock, securities, mutual funds and insurance or annuity schemes with a cash value above $50,000.
India, which recently introduced a new stringent law to deal with unaccounted foreign income and assets of its people, is also hoping to get valuable information from the US for its tax efforts.