India gets one more month to sign FATCA The government can - TopicsExpress

India gets one more month to sign FATCA The government can breathe easy for a little while, with the US giving India and some other countries another month to sign the Foreign Account Tax Compliance Act (FATCA), an agreement that will result in greater flow of financial information. The agreement is stuck following Supreme Courts observations related to the government signing multilateral and bilateral agreements on information flow. In the absence of an agreement all remittances from the US would be hit as they would be subjected to 30% tax. So, an exporter can hope to get $70 on an order of $100. The US has given a months extension to India and some other counties to sign FATCA, revenue secretary Shaktikanta Das said at an event here. The initial deadline set by the US for signing FATCA was December 31 and Das said the finance ministry will seek a go ahead from the Union cabinet before singing the agreement. Under FATCA, US government will sign Inter-Governmental Agreement (IGA) for sharing of information with various countries, including India, where American individuals and companies have accounts and other assets. Under the pact, the exchange of information between the countries will be subject to a confidentiality clause. Amid the debate over black money, finance minister Arun Jaitley had pointed to a caution from the Reserve Bank over the serious consequences in case India fails to comply with the American legislation. The consequences of not signing the agreement with US under FATCA would be disastrous. It will negate the efforts being undertaken by our government to revive the Indian economy, he had said