New Indo-Swiss tax pact comes into effect

The amended Indo-Swiss taxation treaty has came into effect, a development that will allow India to seek specific information on black money and tax evasion cases dating back to January 1, 2011.

The revised taxation pact between the two countries came into force on Monday, at a time when the black money issue has triggered an intense political debate in India.

Senior Bharatiya Janata Party leader L K Advani has said that he would highlight the issue during his 'Jan Chetna Yatra', starting Tuesday.

The Swiss Federal Department of Finance on Monday said the revised double taxation agreement with India in the area of taxes on income and capital entered into force on Monday.

"It contains provisions on the exchange of information in accordance with international standards applicable at present," it said in a statement.

The treaty would be applicable in Switzerland on income originating in tax years starting on or after January 1, 2012.

When it comes to the exchange of information, the provisions in the treaty would 'apply to information referring to tax years which start on or after January 1, 2011'.

The

revised treaty would allow India to seek information on cases related to tax evasion. Under the earlier pact, India could only seek bank details in relation to tax fraud cases.

"The provisions of the agreement will apply in India to income originating in tax years which start on or after April 1, 2012," the statement added.

The treaty will contribute to further the positive development of bilateral economic relations, it said.

The revised treaty was approved by Swiss Parliament on June 17. As per Swiss rules, bilateral tax treaties are subject to public scrutiny for a period of 100 days, which ended on October 6.

India had inked the agreement with Switzerland to revise the treaty in August, 2010. The latest data from the Swiss National Bank shows that the total deposits of Indian individuals and companies in Swiss banks stood at about $2.5 billion at the end of 2010.