Black Money: Swiss banks information sharing to become effective in September, says Finance Minister Pranab Mukherjee

NEW DELHI: Finance Minister Pranab Mukherjee today said the agreement signed with Switzerland for sharing banking information on demand is likely to come into force by September.

He said during Question Hour in the Lok Sabha that he had signed the agreement with Switzerland for sharing banking information of Indians having accounts there during his earlier tenure as Finance Minister in UPA-I government.

He said the Swiss Parliament had ratified the agreement but as per rules of direct democracy prevalent in that country all cantons (states) have to ratify it.

"This process will be completed by September. Information will be shared from April 1, 2011, prospectively not retrospectively. No country has agreed to share information retrospectively," Mukherjee said, adding once it comes into force, banking information will be exchanged between the two countries on demand.

Mukherjee said India's Tax Information Exchange Agreement (TIEA) with four sovereign entities, namely Bahamas, Bermuda, British Virgin Islands and Isle of Man was already in force. These are famous tax havens where blackmoney of individuals from several countries has been parked.

India has also signed TIEA with Cayman Islands but it is yet to come into force.

The Finance Minister said India's Double Taxation Avoidance Agreement (DTAA) with 80 countries was already in force while DTAA with Columbia, Ethiopia, Lithuania, Taiwan and Tanzania has been signed but is yet to come into force.

India has re-negotiated DTAA with Italy, Norway, Singapore and Switzerland.