India’s new framework for the exchange of
foreign tax information will come into effect from 1 July 2026
¨
India’s new framework for
the exchange of foreign tax information will come into effect from 1 July 2026.
¨
The framework aims to
improve transparency and speed up investigations related to cross-border tax
evasion, undisclosed foreign income, and offshore assets.
¨
Under the new rules, all
requests received from foreign tax jurisdictions will be treated as “high
priority.”
¨
The Income Tax Department
must share available information within 15 days.
¨
If complete information
is not available, the concerned officer must submit an interim report within
the same period.
¨
The interim report must
mention progress made, obstacles faced, and the expected timeline for
completion.
¨
Tax information requests
sent by India to other countries (outbound requests) will also face strict
monitoring.
¨
These requests will be
tracked on a monthly basis.
¨
The objective is to
reduce delays and improve accountability in international tax cooperation.
¨
The system will
strengthen information exchange under bilateral tax treaties and multilateral
cooperation mechanisms.
¨
Tax information exchange
is used to investigate undisclosed income and foreign bank accounts.
¨
It is also used in cases
involving offshore assets, cross-border transactions, and transfer pricing.
¨ The mechanism helps tax authorities verify financial records.
¨ It also improves treaty-based international cooperation in tax administration.
