India’s FATCA future unclear after names of alleged tax evaders are made public

On October 27, the Indian government disclosed names of alleged tax evaders to the Indian Supreme Court in an affidavit signed by the Department of Revenue. The affidavit accused some of the country’s top business owners of tax evasion through foreign held bank accounts. This development raises questions over confidentiality clauses in FATCA agreements and other information exchange provisions.

“On completion of investigations in these cases, it was concluded that 18 cases merited prosecution under the Income-tax Act for evasion of tax,” the affidavit stated. Gold trader Pankaj Lodhiya, businessman Pradip Burman, and five directors of mining company Timblo are among the accused.

Despite pledging to crack down on tax evasion, India did not attend the October 29 meeting of the Organisation of Economic Cooperation and Development (OECD). At the meeting, India was meant to sign the Competent Authority Agreement (CAA) with 51 other countries to allow the free flow of information for investigating tax evasion.

“The government wants to act cautiously,” explained Sanjay Sanghvi, a tax partner at law firm Khaitan & Co. “The government must be careful to observe these confidentiality agreements, which…