On Wednesday, the Income Tax Department said that the bank accounts used for transferring funds to and from other nations will have to furnish additional details of the transactions and identity by the 30th of April, 2017 or will get blocked.
The Non-Resident Indians (NRIs) and their spouses or parents are among those who are affected by the order, and will require making a self-declaration with information such as residence status and the reason of transactions, or risking having their accounts frozen.
This is, sort of a, panic situation for NRI’s especially, as they will be back from Overseas only when time permits or for vacation. Till the up-dation happens, it may so may happen that the Bank may freeze the account. The Banks seems to have had no idea about this new rule and need to do the needful before Customers accounts gets blocked. This is also applicable for any Resident Indian who received money from outside India. If you are sending moneys from overseas to your Family in India, or where a husband regularly sends money to his wife, from his account in United States where he works, this could be a serious issue.
There are many banks that are caught unaware about it, and they will now need to rush to satisfy with the guideline before the end of the month.
The order is a sequence of a mutual agreement with the United States for the implementation of Foreign Account Tax Compliance Act (FATCA) by India which began in 31st of August, 2015. The contract aims to reveal the tax evasion by sharing the information of transactions by people in between the two countries.
In respective to the Wednesday’s order for the accounts which was opened in between July 2014 and the date from which the information was to be exchanged, and August 2015, when the agreement came into effect.
Entities such as firms too will require to satisfy with the self-declaration order, which also covers the other financial instruments such as mutual funds.
As per the Reserve Bank of India’s norms, permanent account number (PAN), Aadhaar Card, driver’s license, voter’s identity card or passport will present as the proof of identity and address.
Therefore, Aadhaar is not mandatory for the self declaration, as informed by the senior I-T department official.
As per the Wednesday’s order, experts said that India shows responsibility to promote tax transparency and automatic exchange of information. At the same time, it provides opportunities to the financial institutions to deal with the non-compliant accounts where the process of due diligence and attaining of self-certification is not yet completed.
As per the government, the deadline was set to 31st of August, 2016 for the banks and financial institutions to protect the self-declarations from their customers. But the deadline was then extended regularly, before a more inflexible limit was set on Wednesday.
As per the banking sources, the consent would not be a problem for the large and many mid-sized banks but the smaller ones may battle to meet the rigid deadline.
During the exercise, the accounts which are blocked can be unfrozen after the submission of the self-certification and due diligence is carried out as stated in the circular.
Tax Assist (an Alfred Jordan initiative) is a Tax Advisory specialising in International & NRI Tax. Tax Assist services Clients in 40 Countries globally & PAN India. A Team of Accounting & Legal professionals provide cost effective, timely & most importantly, dependable services in India.
For any assistance or queries, please contact on nri@TaxAssist.in or + 91 98307 56567
The Non-Resident Indians (NRIs) and their spouses or parents are among those who are affected by the order, and will require making a self-declaration with information such as residence status and the reason of transactions, or risking having their accounts frozen.
This is, sort of a, panic situation for NRI’s especially, as they will be back from Overseas only when time permits or for vacation. Till the up-dation happens, it may so may happen that the Bank may freeze the account. The Banks seems to have had no idea about this new rule and need to do the needful before Customers accounts gets blocked. This is also applicable for any Resident Indian who received money from outside India. If you are sending moneys from overseas to your Family in India, or where a husband regularly sends money to his wife, from his account in United States where he works, this could be a serious issue.
There are many banks that are caught unaware about it, and they will now need to rush to satisfy with the guideline before the end of the month.
The order is a sequence of a mutual agreement with the United States for the implementation of Foreign Account Tax Compliance Act (FATCA) by India which began in 31st of August, 2015. The contract aims to reveal the tax evasion by sharing the information of transactions by people in between the two countries.
In respective to the Wednesday’s order for the accounts which was opened in between July 2014 and the date from which the information was to be exchanged, and August 2015, when the agreement came into effect.
Entities such as firms too will require to satisfy with the self-declaration order, which also covers the other financial instruments such as mutual funds.
As per the Reserve Bank of India’s norms, permanent account number (PAN), Aadhaar Card, driver’s license, voter’s identity card or passport will present as the proof of identity and address.
Therefore, Aadhaar is not mandatory for the self declaration, as informed by the senior I-T department official.
As per the Wednesday’s order, experts said that India shows responsibility to promote tax transparency and automatic exchange of information. At the same time, it provides opportunities to the financial institutions to deal with the non-compliant accounts where the process of due diligence and attaining of self-certification is not yet completed.
As per the government, the deadline was set to 31st of August, 2016 for the banks and financial institutions to protect the self-declarations from their customers. But the deadline was then extended regularly, before a more inflexible limit was set on Wednesday.
As per the banking sources, the consent would not be a problem for the large and many mid-sized banks but the smaller ones may battle to meet the rigid deadline.
During the exercise, the accounts which are blocked can be unfrozen after the submission of the self-certification and due diligence is carried out as stated in the circular.
Tax Assist (an Alfred Jordan initiative) is a Tax Advisory specialising in International & NRI Tax. Tax Assist services Clients in 40 Countries globally & PAN India. A Team of Accounting & Legal professionals provide cost effective, timely & most importantly, dependable services in India.
For any assistance or queries, please contact on nri@TaxAssist.in or + 91 98307 56567
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