Government to implement FATCA to take over on Black Money

FATCA will be subjected to cover all fresh accounts opened by Indian Financial Institutions starting from July 1, 2014.

India is taking cues from US on how to tackle the offshore tax evasion problem, with the signing of the accord known as FATCA. The law was inked by Revenue Secretary Shaktikanta Das and US Ambassdor Richard Verma.

FATCA will be subjected to cover all fresh accounts opened by Indian Financial Institutions starting from July 1, 2014. Also they are required to share all the necessary data with the government in regards to all the account that has been filed from July 1 till December  31, 2014, allowing the government to share this data with US by September 30, 2015.

In case if a financial institution fails to follow the regulation of FATCA, it will be charged with 30 percent penalty tax on all its US  revenues, including dividend , interest, fees and sales.

"The signing of IGA is a reaffirmation of the shared commitment of India and USA towards tax transparency and the fight against offshore tax evasion and avoidance. The agreement underscores growing international cooperation to end tax evasion everywhere," a finance ministry statement said.

According to FATCA, participating foreign banks and financial institutions are needed to provide all the necessary information of offshore accounts and assets of  U.S. citizens and foreign firms under which U.S. taxpayers hold significant ownership.