New Swiss formula: Indo-Swiss Double Taxation Avoidance Agreement (DTAA)

While India waits for its revised Double Taxation Avoidance Agreement (DTAA) to come into effect—the Swiss will inform India, by October 7, as to whether the DTAA will have to be subjected to a national referendum—a new agreement signed on Wednesday by the Swiss and UK governments opens up another avenue for action. The Indo-Swiss DTAA, when it does come into action, however, does not mean the Swiss authorities will give Indian tax authorities an excel sheet with the name of Indian holders in Swiss banks with the amounts they hold in each account. The way it works, however, is that the Indian taxman will have to make a request and then the information will be made available—this means there will be no fishing expedition, the Indian taxman must have some basic details to begin with, and a credible reason for asking for the account details.

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