Filed your FATCA? If not, your account will be blocked after April 30

What is FATCA?

FATCA is part of an anti-tax-evasion agreement between US and India, designed to locate income and assets held by US persons in offshore accounts. The agreement amounts to automatic sharing of investor information between the two countries.

The Ministry of Finance has instructed financial institutions — MFs, banks and insurance firms — to block non-compliant accounts.

Last year, the tax department had extended the deadline to April 30, 2017 from the earlier envisaged August 2016 deadline.

However, most likely your financial institution would have informed you if you haven’t done already.

How can one be FATCA compliant?

Investors and account holders have to provide a self-certification about 'tax residency' to their respective financial institutions for compliance with FATCA.

"Queries are being received from financial institutions regarding the revised time lines for completion of due diligence. The financial institutions are advised that all efforts should be made to obtain the self-certification (for FATCA compliance)," the Ministry of Finance said in statement.

"The account holders may be informed that, in case self-certifications are not provided till April 30, 2017, the accounts would be blocked, which would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts," it added.

The FATCA umbrella

All Indian investors, who hold accounts in any financial institutions like banks, mutual funds, insurance or other investments like fixed deposits, are required to file a supplementary FATCA self-certification form to comply with this KYC (know-your-customer) requirement till April 30.

FATCA is not limited to Indian residents and you need to file information under the FATCA/CRS (common reporting standard) guidelines even if you are a NRI investor. All joint investment account holders, including any power of attorney holders and guardians of minors also need to attach their FATCA certifications.

This is applicable to individual and entity accounts opened between July 1, 2014 and August 31, 2015.

What are the details required?

The account holders need to fill the details like PAN card information, country of birth, country of residence for tax purpose, documents supporting it nationality, occupation, gross annual income, whether you are a politically-exposed person, and tax identification number (for investors from other countries). If the taxpayer identification document is not available, an explanation of the same needs to be enclosed.

Government-issued identity cards such as PAN card, passport, election voter ID card, Aadhaar card can be used.

How to file FATCA/CRS details?

FATCA/CRS details can be filed using a self-certification form that is available with the mutual fund company’s website, as well as at all service centers/asset management companies (AMCs) or the insurance company or bank you are dealing with. You can use either offline or online mode to submit your FATCA form details. For physical submission, you need to duly sign the FATCA/CRS form along with copies of necessary and relevant documents and submit the same in your nearest branch.

You can also approach your Registrar and Transfer Agent (R&T) for online submission, where your PAN card is used to generate a one-time password sent on your registered mobile or email.