NEW DELHI: The Indian government is likely to sign a pact with the U.S. on sharing of tax information. The U.S. tax compliance law, FATCA, or Foreign Account Tax Compliance Act, is aimed at combating possible tax evasion by Americans through financial entities of other countries.

Under FATCA, the U.S. government has inter-governmental agreements for sharing of information with various countries where American individuals and companies have accounts and other assets.

The pact is likely to be signed by Revenue Secretary Shaktikanta Das and U.S. Ambassador Richard Verma on July 9, sources said.

According to a finance ministry release on the new black money law, India is expected to start receiving information through automatic exchange of information (AEOI) route under FATCA from the U.S. later in the year.

FATCA compliance will cover all new accounts opened by Indian financial institutions from July 1, 2014. Further, Indian financial institutions would be obliged to share data with the government in respect of all new accounts opened from July 1 till December 31, 2014, to enable the Indian government share this data with the U.S. by September 30, 2015.

If a financial institution does not comply with FATCA, it would have to pay a penalty tax of 30 per cent on all its U.S. revenues, including dividend, interest, fees and sales.

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