The deal inked between India and Switzerland is aimed at curbing black money (representational)
In a move aimed at combating black money stashed abroad, India signed an agreement with Switzerland on Thursday that would allow automatic exchange of tax-related information from January 1 2018, the Central Board of Direct Taxes (CBDT) said.
"With the completion of the parliamentary procedure in Switzerland and signing of mutual agreement, India and Switzerland are set for automatic exchange of information for the period beginning from January 1, 2018," the CBDT said.
The policy-making body for the Income Tax Department said the agreement was signed by CBDT chairman Sushil Chandra and Swiss Ambassador to India Andreas Baum at the North Block in New Delhi.
A joint declaration for the implementation of Automatic Exchange of Information (AEOI) was signed last month between the two sides and it provided that both countries would start collecting data in accordance with the global standards in 2018 and exchange it from 2019 onward.
While Switzerland has conformed to the global standards on automatic exchange of information with the signing of the declaration, India, on its part, has promised to safeguard the confidentiality of the data. "It will now be possible for India to receive from September, 2019 onward, the financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis," the government earlier said.
Switzerland, which has always been at the centre of the debate on black money allegedly stashed by Indians abroad, used to be known for very strong secrecy walls till a few years ago around its banking practices.
A huge global pressure has resulted in Switzerland relenting on the tough secrecy clauses its local laws gave to the banks. Official sources said that several information requests on details about Indians who had accounts in Swiss banks were still pending.
The AEOI conforms to a norm set by global economic body the Organisation for Economic Co-operation and Development for tax transparency.