CBDT clarifies on implementation of FACTA, common reporting standards
February, 19th 2016
The Finance Ministry has clarified on implementation of Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards and said that all fixed deposits and auto sweep facilities in pre-existing savings bank accounts will not have to be reported.
“During stakeholders consultations, representatives of financial institutions informed that in such cases, no additional documentation is obtained for these fixed deposits accounts as they are intrinsically related to existing saving bank account and all KYC documents are available for the existing saving bank account,” the Central Board of Direct Taxes said on Friday.
Accordingly, fixed deposits in savings accounts opened before June 30, 2014 and December 31, 2015 will not have to be reported for FATCA and CRS, respectively.
India had signed the FATCA in July last year, which aims to counter tax evasion by US taxpayers who use offshore accounts to park money otherwise taxable in the US.
Similarly, the CRS was released by OECD and G-20 countries as a standard basis for automatic tax information exchange between member countries through respective bilateral tax treaties.
The guidelines also said that for the upcoming reporting in March 2015 and May 2016, all reporting has to be done in Indian currency. For the reporting in 2017, Form 61B and Schema will be suitably modified to include a field for capturing the type of currency.