FATCA to strengthen India's fight against black money: FinMin

India's fight against black money menace will get a boost with the signing of the FATCA, an inter-governmental pact for the US tax compliance law, a top revenue department official said.
The Foreign Account Tax Compliance Act (FATCA), which will be signed tomorrow by Revenue Secretary Shaktikanta Das and US Ambassdor Richard Verma, will help India in obtaining tax and financial information, the official said.
"It (the signing of FATCA tomorrow) will be a major milestone in our ability to get tax related information from other country. The government's resolve to fight black money will be strengthened," the official told PTI.

The Foreign Account Tax Compliance Act (FATCA) is aimed at combating possible tax evasion by Americans through financial entities of other countries.
The official said that the financial regulators will issue detailed guidelines, adding "all insurance, banking, pension and broking companies will have to share information."
He further said that India will begin to exchange information automatically with other countries by 2017.

Under FATCA, the US government has Inter-governmental Agreement (IGA) for sharing of information with various countries where American individuals and companies have accounts and other assets.
FATCA compliance will cover all new accounts opened by Indian Financial Institutions from July 1, 2014 onwards.

Further, they would be obliged to share data with the government in respect of all new accounts opened from July 1 till December 31, 2014, to enable the government to share this data with US by September 30, 2015.
If a financial institution does not comply to FATCA, it would have to pay 30 per cent penalty tax on all its US revenues, including dividend, interest, fees and sales.