The CBDT vide Notification No. 56/2026 dated April 02, 2026 has notified the Memorandum of Understanding (MoU) between India and Japan for assistance in the collection of taxes, reinforcing bilateral cooperation in tax administration and efforts to combat fiscal evasion. The notification has been issued by the Ministry of Finance (Department of Revenue) under the provisions of the Income-tax Act, 1961.
Background of the Agreement: The MoU has been concluded under Article 26A of the Convention between the Government of the Republic of India and the Government of Japan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. The agreement was signed on June 30, 2025, in Tokyo and subsequently on July 8, 2025, in New Delhi, and forms part of the growing framework of international tax cooperation between the two countries.
Effective Date and Applicability: As per the provisions of the MoU, it shall apply to requests for assistance in tax collection made after the later of the dates of signature by the two competent authorities. Since the later date of signature is July 8, 2025, in India, the MoU has entered into force from this date. Accordingly, its provisions shall be applicable in India for all requests for tax collection made on or after July 8, 2025.
Legal Authority for Notification: The notification has been issued in exercise of the powers conferred under sub-section (1) of Section 90 of the Income-tax Act, 1961. This provision empowers the Central Government to give effect to agreements with foreign countries for avoidance of double taxation, prevention of fiscal evasion, and for mutual assistance in tax matters.
Significance of the Development: The operationalization of this MoU marks an important step in strengthening India–Japan economic cooperation. It is expected to facilitate effective cross-border tax recovery, improve compliance, and act as a deterrent against tax evasion. The agreement will also enhance transparency and administrative efficiency in handling international tax matters.
The Notification can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/04/INDIA-JAPAN-MOU-CBDT-NN-56.pdf
