New Delhi, Oct 27 :
Behind the step-by-step approach in the government’s disclosure of names of foreign bank account holders is the confidentiality clause under the Double Taxation Avoidance Treaty (DTAT) that prevents making public the identity of the account holders.
The aim of the DTAT, that India has signed with many countries, is to avoid double taxation of same income. The treaty can be bilateral, or multilateral.
India has DTAT with over 80 countries and plans to sign more with others. The major countries with which it has signed the DTAT are the US, Britain, the UAE, Canada, Australia, Saudi Arabia, Singapore, Switzerland, New Zealand and Mauritius.
The confidentiality, or secrecy clause forbids sharing of details obtained through such treaties with other law enforcement and investigation agencies.
Complimenting the finance minister’s stand industry chamber Assocham had Sunday said that premature disclosure of names of Indians with allegedly illegal bank accounts abroad will hurt India’s battle against black money.
“The double taxation avoidance treaties are important for Indian residents and corporates which can avoid paying taxes twice,” Assocham secretary general D.S. Rawat said in a statement.
“Revealing the names of individuals allegedly holding unaccounted money can make headlines but will surely make India’s battle against the menace weak.
“Besides, violation of DTATs with 88 odd countries will deal a severe blow to the country’s credibility,” he added.
In a major step that will aid India track and recover black money stashed abroad, G20 finance ministers agreed last month on allowing automatic sharing of all bank information with tax authorities at the end of each year, starting 2017.
At their meeting in Cairns, the ministers agreed to begin exchanging information automatically between each other and with other countries by 2017 or end-2018.
The deal will not only allow the countries to extract bank details for future, but they can also avail account balance information of the past five to six years upon request.