- India concluded an agreement with the US under its Foreign Account Tax Compliance Act (FATCA) to combat possible tax evasions by Americans through Indian financial entities.
- Securities and Exchange Board of India (SEBI) will issue guidelines for market intermediaries for the same this fiscal.
- FATCA, which became a law in 2010, came into effect in July 2014 after signing of IGAs with different countries. Provisions under it:
- As per upon Model 1 — Intergovernmental Agreement (IGA), through CBDT, financial entities need to report information on U.S. account holders to U.S. IRS (internal revenue service).
- US govt is required to sign IGAs with countries where American individuals and companies are holding assets/accounts.
- SEBI was entrusted to examine the applicability of its provisions to all market intermediaries regulated by itself, already done in coordination with Finance
- Regulatory measures by SEBI coupled with signing of IGA would aid Indian Financial Institutions & Corporates to comply with FATCA.
- RBI and other regulators will also define guidelines to ensure compliance with FATCA
- Read at: http://www.thehindu.com/todays-paper/tp-business/india-concludes-pact-with-us-on-tax-evasion-under-fatca/article5939008.ece
Exams Perspective:
- Foreign Account Tax Compliance Act (FATCA)
- Securities and Exchange Board of India (SEBI)
- Tax Evasion
- Double Taxation Avoidance Agreement (DTAA)
- CBDT
- RBI