NEW DELHI: India and US signed an agreement on tax compliance to exchange information on cases of tax avoidance through overseas entities.
The agreement on the Foreign Account Compliance Act (FATCA) would also ensure that Indian corporate would not have to pay 30 per cent withholding tax on their US income.
A meeting of the Union Cabinet, chaired by Prime Minister Narendra Modi, approved signing of an Inter-Governmental Agreement (I GA) between India and the US for implementation of the FATCA.
FATCA is a US law which seeks to facilitate flow of financial information. It was also decided to join the Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Information (AEOI).
Sources said decision will enable Indian authorities to receive information from the US and from other jurisdictions with which India has entered into an agreement for AEOI about the assets of Indians held abroad.
