New Delhi, April 6: India is set to exchange tax evasion information with all G20 countries by 2017-18, as a step to address cases like those coming out of "Panama Papers" in which over 500 Indians are said to have invested in foreign accounts, sources in the finance ministry said.
"By 2017-18, India will have automatic exchange of information (AEIO) with all the G20 countries. As many as 96 countries, including the UK, Germany and France, already have a consensus on AEIO and more countries will join this gradually," a government official told IANS.
The recently revealed cases like "Panama papers" would not have occurred, had India had an accord on the common reporting standard (CRS) under automatic exchange of information with other countries, the official told IANS.
Common reporting standard falls under AEIO, which allows for countries to exchange foreign investment details of its citizens, to check tax evasion and stashing of unaccounted wealth in tax havens.
The information exchange agreement will enable the government to clamp down on tax evasion as off-shore accounts of citizens will be curtailed substantially with information on accounts, interest payments and beneficial ownership being shared between countries.
India was a part of the Early Adoptor Group of this automatic information exchange framework. It joined the global efforts during an Organisation for Economic Cooperation and Development (OECD) meeting in October 2014.
The first exchange of information on new off-shore accounts opened in 2016 and at the end of 2015 will take place in 2017, as agreed upon by the Early Adoptor Group. The global standard of automatic exchange of information was developed by the OECD in July 2014.
Finance Minister Arun Jaitley said on Monday adventurism in avoiding taxes will prove costly.
"This is a stern reminder to all of us that with the G20 initiatives, FATCA (Foreign Account Tax Compliance Act) and bilateral transactions in place with effect from 2017, the world is going to be a far more transparent institution," he told industry captains.
"The world is becoming one where adventurism, like in the past, is going to be increasingly a risky proposition," Jaitley said at the CII Annual Session.
Last year, India signed a convention on administrative assistance in tax issues. In 2014, the G20 nations agreed to a new global transparency standard for around 90 countries and jurisdictions to begin automatic exchange of tax information.