In a big step towards fighting black money stashed overseas, Switzerland today agreed to automatic sharing of information with India on Swiss bank accounts of Indians as of September 2018 and onwards.They will not share details about accounts held prior to that period, while the first such exchange will happen in September 2019.
CBDT chairman Sushil Chandra and deputy chief of mission of Swiss embassy in India Gilles Roduit on Tuesday signed the 'joint declaration' for the implementation of Automatic Exchange of Information (AEOI) between the two nations.
"As a result, it will now be possible for India to receive from September, 2019 onwards, the financial information of accounts held by Indian residents in Switzerland for 2018 and subsequent years, on an automatic basis," the finance ministry said in a statement.
It further said that fighting the menace of black money stashed in offshore accounts has been a key priority area for this government.
Describing the signing of declaration as a "big step", Revenue Secretary Hasmukh Adhia tweeted: "The income tax department will be able to obtain information from accounts of all Indians stashed in Switzerland from 2018 onwards."
The Swiss Federal Department of Finance said in a statement that the signing of the joint declaration with India confirms Switzerland's international commitment to implementing the automatic exchange of Information (AEOI) standard.
"Switzerland is thus strengthening its network of AEOI partner states. India meets in particular the high demands in terms of adherence to the principle of speciality and the safeguarding of confidentiality for the data delivered, which are prerequisites for the introduction of the AEOI," it said.
Switzerland, which has always been at the centre of the debate on black money allegedly stashed by Indians abroad, used to be known for very strong secrecy walls till a few years ago around its banking practices.
A huge global pressure has resulted in Switzerland relenting on the tough secrecy clauses its local laws gave to the banks. Several information requests on details about Indians who had accounts in Swiss banks are still pending.
On June 6, Prime Minister Narendra Modi had met Swiss President Johann Schneider-Ammann at Geneva and discussed the need for expeditious exchange of information for combating tax evasion together with an early start to negotiations on the Agreement for Automatic Exchange of Information.
As a follow up, Revenue Secretary Hasmukh Adhia and Switzerland's State Secretary for International Financial Matters Jacques de Watteville met on June 15 and agreed to move towards an early agreement for the implementation of AEOI between the two countries.