Have you got your account FATCA (foreign account tax compliance act) compliant? If you haven't then Monday could be a problem for you. Mutual fund investors, bank account holders and those who have invested in insurance schemes cannot operate their accounts, which were opened between July 1, 2014 and August 31, 2015, from May 1 if they are not compliant with FATCA.
But what is FATCA and why is there a big fuss now?
FATCA enables automatic exchange of financial information between India and the US. Indian financial institutions have to provide necessary information to Indian tax authorities, which will then be transmitted to the US. The inter-governmental agreement (IGA) with the US for implementing FATCA came into effect on August 31, 2015. Financial institutions were told to obtain self-certification and carry out due diligence procedure to determine the reasonableness of the self-certification in respect of all individual and entity accounts opened from July 1, 2014 to August 31, 2015.
If I don't get it done now, what could I face?
a) For bank account holders
If you are a bank account holder and if you haven't given a self-certification till 30 April 2017, your account could be frozen, which would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts.
Investors and account holders have to provide a self-certification about 'tax residency' to their respective financial institutions for compliance with FATCA failing which the account will be blocked.
b) For NPS account holders
If you have opened a National Pension System (NPS) account on or after July 1, 2014 and it is being maintained with NSDL as Central Recordkeeping Agency for NPS, it will also get blocked unless you have submitted a self-certification of FATCA.
You may have got an email, sms to download the self-certification form and submit the duly filled up physical self-certification (along with documentary evidence) to NSDL-CRA with signature.
Copy and paste this link for help: https://www.npscra.nsdl.co.in/download/pdf/FATCA%20Self%20Declaration%20Format.pdf
c) For mutual fund investors
As per a Finance ministry release issued on April 11, 2017, all accounts/Folios with mutual funds, opened between July 1, 2014 and August 31, 2015 , must be FATCA compliant by April 30th, 2017.
In case of non-compliance by this date these accounts will be blocked i.e. no financial transactions will be allowed in such non-compliant accounts after April 30, 2017. Financial transactions, such as purchase, redemption, will be allowed only after these accounts become FATCA compliant.
One can copy and paste the following links of the registrars of the mutual funds to update one's details.
1. CAMS: http://www.camsonline.com/FATCA/COL_FATCAOnlineIndividualForm.aspx?amc=ALL
2. KARVY: https://www.karvymfs.com/karvy/fatca-kyc.aspx
3.Sundaram BNP Paribas Fund Services Limited; https://www.sundarambnpparibasfs.in/web/service/fatca/
Read more at:
http://economictimes.indiatimes.com/articleshow/58412226.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
What all do I need to submit for this?
FATCA compliance simply requires a declaration giving information such as your PAN details, country of birth, country of residence, Nationality, Occupation, Gross Annual Income, and details of whether you're a politically exposed person. It is a mandatory exercise for both Individual and Non-Individual Investors. If you have been paying taxes in any country apart from India, you need to provide the tax identification number.
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