India, Spain sign tax avoidance agreement

India on Friday signed a tax avoidance agreement with Spain that will facilitate exchange of information on its tax evaders and getting details of financial transactions of domestic companies. 

The agreement on amending the protocol for avoidance of double taxation and the prevention of tax evasion was signed by finance minister P Chidambaram with Spanish foreign ministerJose Manuel Garcia-Margallo Marfil. 

A press note from the finance ministry said the agreement would help in collection of taxes and would reduce obstacles in gathering information and also prevent the abuse of the convention's benefits. 

The government's recent initiatives in revising tax treaties have helped the flow of information from foreign countries. 

The government has received transaction details of its nationals from banks in several countries, including the US, Japan, South Korea, Denmark, Czech Republic and Finland. 

Though all information received from abroad may not be about illicit transactions as some of them may be legitimate deals, the deluge of information has given the government hundreds of crores in tax recoveries. (TNN)