The Central Board of Direct Taxes (CBDT) has issued a directive to the Income Tax Department Wednesday saying that any information obtained on probing of overseas black money through foreign tax treaties is completely "confidential" and should be shared with other agencies after gathering required consent from the corresponding country.
The directive issued by the tax board has also asked the I-T department to guard against the disclosure of such matters as they are "serious" in nature.
"It is India’s sovereign obligation to keep the information obtained through the exchange of information (EOI) process of tax treaties with other jurisdictions confidential. Any disclosure of the information received under tax treaties with unauthorised persons, either intentionally or by accident, is a serious matter," the directive, which was accessed by news agency PTI, read.
The tax board stressed the confidentiality clause which needs to be maintained with the foreign jurisdictions as a part of the various tax treaties between India and other nations.
The major tax treaties are categorised as: Double Taxation Avoidance Agreement (DTAA), Tax Information Exchange Agreements (TIEAs) and the Multi-lateral Convention on Mutual Administrative Assistance in Tax Matters (MAC).
"This is necessary for continued cooperation in the EOI process from our treaty partners," the directive noted.
"Thus, the information received under tax treaties cannot be used for enforcement of any law other than the laws concerning taxes covered by the relevant tax treaty. The information received can only be shared with any other law enforcement agency such as the Enforcement Directorate and CBI after obtaining consent from the competent authority of the sending jurisdiction," the directive further added.
The tax board stated that the investigation agencies should first take the necessary permission from the CBDT through its foreign tax and tax research department in case they want such confidential information to be shared with other agencies in money laundering or corruption cases.
"These instructions may be brought to the notice of all officers in your region for strict compliance," it added.