India and the US recently signed a tax information sharing agreement that will facilitate exchange of information between the two countries, beginning October.
Foreign Account Tax Compliance Act (Fatca) was enacted by the US government in 2010, as part of the Hiring Incentives to Restore Employment (HIRE) Act. Fatca requires all foreign financial institutions (FFI) to report information about financial accounts held by the US taxpayers (US citizens and US tax residents) to India’s Central Board of Direct Taxes (CBDT), which, in turn, will share the information with the US Internal Revenue Service (IRS).
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