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The Ministry of Finance (Department of Revenue) has issued Notification No. 56/2026 under the Income-tax Act, 1961, formally giving effect to a Memorandum of Understanding (MoU) between India and Japan for assistance in the collection of taxes. This development strengthens bilateral cooperation in
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FAQ :
The MoU aims to provide assistance between India and Japan for the collection of taxes, strengthening bilateral cooperation in tackling tax evasion and ensuring efficient cross-border tax recovery.
The MoU comes into force from July 8, 2025, which is the later date of signing in New Delhi.
The notification has been issued under Section 90(1) of the Income-tax Act, 1961, which allows the Central Government to implement tax treaties and agreements with foreign countries.
It enables tax authorities in India and Japan to assist each other in collecting tax dues, recover pending tax liabilities across jurisdictions, and improve compliance among multinational taxpayers.
Individuals and businesses with financial ties in Japan should ensure strict tax compliance, as pending tax dues may now be recovered even across borders.
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