New Delhi: The Income tax department has asked financial institutions (FIs) to get self-certification from account holders by April 30 to comply with FATCA provision and avoid blocking of accounts.
The Central Board of Direct Taxes (CBDT) also advised all financial institutions that all efforts should be made by them to obtain self-certification.
Here are the key things you should know
- FATCA allows automatic exchange of financial information between India and the US
- India had entered into an agreement with the United States for implementation of the Foreign Accounts Tax Compliance Act (FATCA) with effect from August 31, 2015
- Under the Income Tax Rules, the financial institutions had to obtain self-certification from account holders by August 31, 2016, in respect of all individual and entity accounts opened from July 1, 2014-August 31, 2015
- In view of the difficulties faced by stakeholders, the tax department had on August 31, 2016, indefinitely extended the deadline for complying with self-certification norms
- It said if the account is blocked due to lack of self-certification, then the transactions by the account holder in such blocked accounts will be permitted once the self-certification is obtained and due diligence is completed
- Under the FATCA provisions, financial institutions are required to obtain self-certification and documentation or else they were required to close the accounts and report the same if found to be a "reportable account" as per the prescribed due diligence procedure for a pre-existing account
With PTI Inputs