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Washington has so far signed pacts covering more than 80 tax
jurisdictions to implement the Foreign Account Tax Compliance
Act 2010, or FATCA, requiring financial institutions to share
information about Americans' accounts worth more than $50,000.
By signing the agreement, India hopes to garner Washington's
support for its own efforts to bring back illicit funds stashed
by Indians in foreign tax havens and boost revenues.
Last year, Prime Minister Narendra Modi joined leaders of G20
countries in Australia in agreeing to countries automatically
exchanging tax information on a reciprocal basis by the end of
2018.
Under the agreement, banks, mutual funds, insurance, pension and
stock-broking firms will report their American client details to
the tax department for sharing with the U.S., said a finance
ministry official, who declined to be named.
Investors will have to provide correct information about their
tax residency and financial assets that would be shared with
U.S. tax authorities, he said.
The agreement could result in a fall in investments from small
U.S investors into India's equity and debt markets for some
time, but would help putting a fear of punishment among tax
evaders, said another official.
(Reporting by Manoj Kumar; Editing by Nick Macfie)
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