The two countries have signed an agreement over how the US FATCA legislation will operate in India.

The governments of India and the US have signed an accord over the implementation of the US Foreign Account Tax Compliance Act, FATCA, media reports said.

The agreement over FATCA was signed on Thursday by Revenue Secretary Shaktikanta Das and US Ambassador Richard Verma.

India has opted to sign inter-governmental “model 1” agreement with the US under FATCA, through which financial institutions send relevant data to the local India authorities rather than enter direct agreements with US authorities.