The Indian government announced in November 2016 the signing of a protocol amending the agreement with Japan for the avoidance of double taxation and fiscal evasion. The amendments entered into force on 29 October 2016.
The protocol adopts internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest. It further provides that the information received from Japan in respect of a resident of India can be shared with other law enforcement agencies with authorization of the competent authority of Japan and vice versa.
The protocol provides for exemption of interest income from taxation in the source country with respect to debt claims insured by the government or government-owned financial institutions.
The protocol also inserts a new article on assistance in collection of taxes. India and Japan will now lend assistance to each other in the collection of revenue claims.
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Additional copy regarding new treaties with India was compiled by Nishith Desai Associates (NDA), a research-based international law firm with offices in Mumbai, New Delhi, Bangalore, Singapore, Silicon Valley and Munich.