India, Cayman Islands tax info exchange pact operational

NEW DELHI: The tax information exchange agreement between India and Cayman Islands - located in the western Caribbean Sea - has been implemented, the Income Tax Department said.

"The Central Government hereby directs that all the provisions of the said Agreement...shall be given effect to in the Union of India forthwith," the notification of Central Board of Direct Taxes (CBDT) dated December 27, 2011 said.

The pact was signed at Cayman Islands on March 21, 2011. Indian and Cayman Islands would exchange tax related information relevant to enforcement and administration of their domestic laws, the CBDT said.

The pact covers "taxes of every kind and description". With the pact becoming operational, India could also seek banking information about persons and companies from authorities of Cayman Islands.

The agreement will remain in force until terminated by either of the contracting party.

In its fight against the black money and tax evasion, India has been negotiating and re-negotiating double taxation avoidance agreements and tax information exchange agreements with different countries and sovereign jurisdictions.