In a significant move that will eventually help the government seek information from tax havens, the revenue department in the finance ministry has started the process of defining non-cooperative jurisdictions countries that do not share any information about companies evading tax in India.

Government sources told Media that the finance ministry has formed a five-member committee for defining the characteristics of such a jurisdiction and then prepare a list of countries that would qualify as a non-cooperative jurisdiction. The committee would have to do a delicate balancing act as the issue is not only financial but also political, the sources said.

According to the sources, the committee will delve into the mechanism used by such jurisdictions for acting as tax havens and the reasons for non-existence of information exchange processes for tax purposes. After collecting inputs, the department will develop a tool box to counter such activities, a source said.

It will also work on measures to be adopted by India in combating such jurisdictions, the sources said, adding that these would form a part of the proposed Direct Tax Code (DTC).