India’s markets regulator and its apex taxation body for direct taxation have signed an agreement to exchange data held by one another. Under a memorandum of understanding (MoU) signed on July 8, Securities and Exchange Board of India (SEBI) and the Central Board of Direct Taxes (CBDT) will be able to exchange data on an automatic and regular basis. The MoU will also allow the two agencies to exchange “any information in their respective databases” on request and on suo moto basis, to carry out their functions under the law.
A Data Exchange Steering Group has also been formed that will periodically meet to review the data exchange status and take steps to improve the data sharing mechanism. The Group’s composition is currently unknown.
The MoU was signed by CBDT’s Anu J. Singh, Principal Director General of Income Tax (Systems), and SEBI’s Madhabi Puri Buch, whole time member, and went into effect on Wednesday itself.
Why this is important: Since data can be shared on a suo moto basis, the two agencies have unfettered access to each other’s databases which they can use at will and information is no longer siloed. This is symptomatic of a larger trend in the government that seeks to merge different databases to great centralised repositories of data on citizens and organisations.