The ambitious anti-offshore tax evasion and black money detection pact between India and the US -Foreign Account Tax Compliance Act (FATCA)- will become operational from Wednesday.
The pact aims to cover automatic sharing of information on bank accounts as well as financial products like equities, mutual funds and insurance, and is aimed at fighting the menace of black money stashed abroad.
“The Foreign Account Tax Compliance Act (FATCA) will get operational from September 30 as it was decided between the two countries. All protocols and procedures have been put in place by Indian authorities in this regard,” a senior Finance Ministry official said.
Beginning on Wednesday, banks, mutual funds, insurance, pension and stock-broking firms will report their Indian client details to the US which will be shared with New Delhi.
Indian entities will do a reciprocal information sharing about Americans and it will cover all new accounts opened by Indian financial institutions from July 1, 2014.
An official agreement in this regard was signed by the then Revenue Secretary Shaktikanta Das and US Ambassador to India Richard Verma in July.
