New Delhi: India on Wednesday approved protocols amending tax pacts with Israel and Vietnam to include effective sharing of bank information, a move aimed at dealing with the menace of black money.
Power Minister Piyush Goyal said the Cabinet has approved the protocol amending the Convention and the Protocol between India and Israel for avoidance of double taxation and to prevent of fiscal evasion with respect to taxes on income and on capital.
The protocols provide for internationally accepted standards for "effective exchange of information on tax matters including bank information and information without domestic tax interest", he said.
"This is a continuation of our fight to curb the menace of black money and also bring back all the money that has gone out of the country through misuse of the Double Taxation Avoidance Agreement (DTAA)," Goyal told reporters after the Cabinet meeting.
"Both these agreements provide for internationally accepted standards for effective exchange of information on tax matters... Now we can get bank information and share it with other enforcement agencies," he added.
The information received from Israel and Vietnam in respect of a resident of India can be shared with other law enforcement agencies, like Enforcement Directorate, Directorate of Revenue Intelligence and CBI with authorisation of the Competent Authority of Israel and vice versa.
The Protocol in relation to Israel further provides for 'Limitation of Benefits' Article as an anti-abuse provision aimed at preventing misuse of the Convention.
The provisions of this Article enable use of the provisions of domestic law and measures concerning tax avoidance or evasion in the event of misuse of the Convention.
The existing DTAC between Indian and Israel was signed in 1996. Both the Indian and Israeli sides agreed to update Article 27 on the 'Exchange of Information' in the pact to meet internationally accepted standards.
The DTAA between Indian and Vietnam was signed in 1994.
