In an effort to counter the problem of black money, India has recently signed an agreement with Switzerland that would enable automatic sharing of tax-related information from January 1, 2018. The agreement was signed by CBDT Chairman Mr. Sushil Chandra and Swiss Ambassador to India Mr. Andreas Baum in New Delhi.
As the parliamentary procedure and signing of a mutual agreement are over, both the countries are set for automatic exchange of information from next year. Reportedly, a joint declaration to implement the automatic exchange of information (AEOI) was signed between the two sides in November 2017. Under this, both India and Switzerland will start collecting data according to the global standards in 2018 and from 2019 onwards the information could be exchanged.
With this agreement, Switzerland has complied with the international standards on automatic exchange of information. On the other hand, India has made a promise to safeguard the confidentiality of the data. From September 2019 onwards, India will be able to attain financial information on Indian residents having account in Switzerland for 2018 and the subsequent years, on an automatic basis.
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Switzerland has always been known to be at the centre of the debate when it comes to black money stashed by Indians in the Swiss bank accounts. Moreover, India has been facing the problem of black money for quite a while now. The government is quite determined to bring back the chunks of black money hoarded abroad. Consequently it can solve a lot more issues like eradication of poverty.
It’s not just the Swiss accounts but too much of black money is believed to exist within the country as well. The government had introduced demonetization back in November 2017 to unveil the sources of black money held by some citizens. The 500 rupee notes and 1000 rupee notes were banned overnight and were replaced with 2000 and new 500 rupee notes.
As for the money which is hoarded abroad, this agreement is supposed to bring transparency in the system and unveil the suspicious account holders and transactions. This move can go a long way in removing black money and fighting corruption. Let’s hope the move bears positive results and brings the much needed transparency in the system.
