India in global pact for automatic exchange of financial info

India and five other nations today joined a multilateral agreement for automatic exchange of financial information, a move that will help it combat tax evasion and deal with the problem of black money.

Australia, Canada, Costa Rica, Indonesia and New Zealand are the other five nations that signed the Multilateral Competent Authority Agreement (MCAA) in Paris for automatic exchange of financial account information.

The total number of countries which have agreed to share financial information has now gone up to 60, including Switzerland.

Once fully implemented, the agreement "will help the government to curb tax evasion and deal with the problem of black money", a finance ministry release said.

On behalf of India, the declaration to comply with the provisions of the MCAA was signed by the country's ambassador to France Mohan Kumar, it said.

The Automatic Exchange of Information (AEOI) based on common reporting standards (CRS), the release said, "would enable India to receive information from almost every country in the world including offshore financial centres and would be the key to prevent international tax evasion and avoidance.

"(It) would be instrumental in getting information about assets of Indians held abroad including through entities in which Indians are beneficial owners".

India, it added, had already undertaken necessary legislative steps in Finance Act, 2014, to comply with the global norms for automatic exchange of information.

"Necessary rules and guidelines are being formulated in consultation with financial institutions," it added.

In order to unearth illegal funds stashed abroad, Parliament recently approved a stringent law to deal with black money which will come into force from April 1, 2016.