TMI BlogIncome–tax (11th Amendment) Rules, 2015X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of this rule and rules 114G and 114H,- (1) financial account means an account (other than an excluded account) maintained by a financial institution, and includes- (i) a depository account; (ii) a custodial account; (iii) in the case of an investment entity, any equity or debt interest in the financial institution. Explanation.- For the purposes of this sub-clause financial account shall not include any equity interest or debt interest in an entity that is an investment entity solely because it,- (a) renders investment advice to, and acts on behalf of; or (b) manages portfolios for, and acts on behalf of, a customer for the purpose of investing, managing, or administering financial assets deposited in the name of the customer with a financial institution that is not a non-participating financial institution other than such entity; (iv) in the case of a financial institution not described in sub-clause (iii), any equity or debt interest in the financial institution, if the class of interests was established with a purpose of avoiding reporting in accordance with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (f) cash value insurance contract means an insurance contract (other than an indemnity reinsurance contract between two insurance companies) that has a cash value and in case of a U.S. reportable account such value is greater than an amount equivalent to fifty thousand U.S. dollars. Explanation.- For the purposes of this clause, a single premium life insurance contract which does not permit an amount to be paid on surrender or termination of the contract and which does not allow amounts to be borrowed under or with regard to the contract, shall not constitute a cash value insurance contract; (g) cash value means the greater of- (i) the amount that the policyholder is entitled to receive upon surrender or termination of the contract (determined without reduction for any surrender charge or policy loan); and (ii) the amount the policyholder can borrow under or with regard to the contract, but does not include an amount payable under an insurance contract,- (A) solely by reason of the death of an individual insured under a life insurance contract including a refund of a previously paid pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (E) either annual contributions are limited to an amount equivalent to fifty thousand U.S. dollars or less, or there is maximum lifetime contribution limit to the account of an amount equivalent to one million U.S. dollars or less, in each case applying the rules specified in clause (c) of sub-rule (7) of rule 114H for account aggregation and currency translation. Explanation.- A financial account that otherwise satisfies the requirements of item (E) will not fail to satisfy such requirements solely because such financial account may receive assets or funds transferred from one or more financial accounts that meet the requirements of item (A) or (B) or from one or more retirement or pension funds that meets with the requirements of clauses (e), (f) or (g) of Explanation to clause (1); (ii) an account that satisfies the following requirements, namely:- (A) the account is subject to regulation as a savings vehicle for purposes other than for retirement, or the account (other than U.S. reportable account) is subject to regulation as an investment vehicle for purposes other than for retirement and is regularly traded on an establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any amounts paid prior to the cancellation or termination of the contract; and (D) the contract is not held by a transferee for value; (v) an account that is held solely by an estate if the documentation for such account includes a copy of the deceased's will or death certificate; (vi) an account established in connection with any of the following: (A) a court order or judgment; (B) a sale, exchange, or lease of real or personal property, provided that the account satisfies the following requirements, namely:- (a) the account is funded solely with a down payment, earnest money, deposit in an amount appropriate to secure an obligation directly related to the transaction, or a similar payment, or is funded with a financial asset that is deposited in the account in connection with the sale, exchange, or lease of the property; (b) the account is established and used solely to secure the obligation of the purchaser to pay the purchase price for the property, the seller to pay any contingent liability, or the lessor or lessee to pay for any damages relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmodity, swap (for example, interest rate swaps, currency swaps, basis swaps, interest rate caps, interest rate floors, commodity swaps, equity swaps, equity index swaps, and similar agreements), insurance contract or annuity contract, or any interest (including a futures or forward contract or option) in a security, partnership interest, commodity, swap, insurance contract, or annuity contract: Provided that financial asset shall not include a non-debt and direct interest in an immovable property; (3) financial institution means a custodial institution, a depository institution, an investment entity, or a specified insurance company. Explanation.- For the purposes of this clause,- (a) custodial institution means any entity that holds, as a substantial portion of its business, financial assets for the account of others and where its income attributable to the holding of financial assets and related financial services equals or exceeds twenty per cent. of its gross income during the three financial years preceding the year in which determination is made or the period during which the entity has been in existence, whichever is less; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (r) of Article 1 of the agreement between the Government of the Republic of India and the Government of the United States of America to improve international tax compliance and to implement Foreign Account Tax Compliance Act of the United States of America (herein after referred to as the FATCA agreement), but does not include,- (a) an Indian financial institution; or (b) other jurisdiction, being a jurisdiction that has in effect an agreement with the United States of America to facilitate the implementation of Foreign Account Tax Compliance Act (herein after referred to as other partner jurisdiction), financial institution, other than a financial institution treated as a non-participating financial institution pursuant to sub-paragraph (b) of paragraph 2 of Article 5 of the FATCA agreement or the corresponding provision in an agreement between the United States of America and other partner jurisdiction; (5) non-reporting financial institution means any financial institution that is,- (a) a Governmental entity, International Organisation or Central Bank, other than with respect to a payment that is derived from an obligation hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubdivision of a country or territory (including a state, province, county, or municipality), or any wholly owned agency or instrumentality or controlled entity of a country or territory or of any one or more of the foregoing (where each is also a Governmental entity ) and includes the integral parts, controlled entities, and political subdivisions of such country or territory. Explanation.- For the purpose of clause (A),- (i) an integral part of a country or territory means any person, organisation, agency, bureau, fund, instrumentality, or other body, by whatever name called, that constitutes a governing authority of a country or territory and the net earnings of the governing authority must be credited to its own account or to other accounts of the country or territory, with no portion inuring to the benefit of any private person: Provided that an integral part does not include any individual who is a sovereign, official, or administrator acting in a private or personal capacity: Provided further that the income does not inure to the benefit of private persons if such persons are the intended beneficiaries of a Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding an instrumentality that is separate from the Government of the country or territory, whether or not owned in whole or in part by that country or territory; (D) Treaty Qualified Retirement Fund means a fund established in India, provided that the fund is entitled to benefits under an agreement between India and the Government of any country or territory outside India on income that it derives from sources within such country or territory outside India (or would be entitled to such benefits if it derived any such income) as a resident of India that satisfies any applicable limitation on benefits requirement, and is operated principally to administer or provide pension or retirement benefits; (E) Broad Participation Retirement Fund means a fund established to provide retirement, disability, or death benefits, or any combination thereof, to beneficiaries who are current or former employees (or persons nominated by such employees) of one or more employers in consideration for services rendered: Provided that the fund,- (i) does not have any beneficiary with a right to more than five per cent. of the fund's assets; (ii) is subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets; and (v) the fund is subject to Government regulation and provides information reporting to the income-tax authorities; (G) Pension Fund of a Governmental entity, International Organisation or Central Bank means a fund established by a Governmental entity, International Organisation or Central Bank to provide retirement, disability or death benefits to beneficiaries or participants who are current or former employees (or persons nominated by such employees), or who are not current or former employees, if the benefits provided to such beneficiaries or participants are in consideration of personal services rendered to the Governmental entity, International Organisation or Central Bank; (H) non-public fund of the armed forces means a fund established in India as a regimental fund or non-public fund by the armed forces of the Union of India for the welfare of the current and former members of the armed forces and whose income is exempt from tax under clause (23AA) of section 10 of the Act; (I) Employees' State Insurance Fund means the fund established as Employees' State Insurance Fund under the provisions of the Employees' State I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-clause, a customer overpayment does not refer to credit balances to the extent of disputed charges but includes credit balances resulting from merchandise returns; (M) exempt collective investment vehicle means an investment entity that is regulated as a collective investment vehicle, provided that all of the interests in the collective investment vehicle are held by or through persons other than,- (i) those referred to in sub-clauses (a) to (c) of clause (6); and (ii) a non-participating financial institution. Explanation.- An investment entity which is regulated as a collective investment vehicle does not fail to qualify under this clause as an exempt collective investment vehicle, only because it has issued physical shares in bearer form: Provided that- (i) the collective investment vehicle has not issued, and does not issue, any physical shares in bearer form after the 31st December, 2012; (ii) the collective investment vehicle retires all such shares upon surrender; (iii) the collective investment vehicle performs the due diligence procedures set forth in rule 114H and reports any informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irements under the Prevention of Money-laundering Act, 2002 (15 of 2003); (v) at least ninety eight per cent. of the financial accounts by value maintained by the financial institution are held by residents; (vi) beginning on or before the 30th June, 2014, the policies and procedures of the financial institution are consistent with those set forth in rule 114H, to prevent the financial institution from providing a financial account to any non-participating financial institution and to monitor whether the financial institution opens or maintains a financial account for any reportable person who is not a resident of India (including a non-resident who was a resident of India when the financial account was opened but subsequently ceases to be a resident of India) or any passive non-financial entity with controlling persons who are reportable persons; (vii) such policies and procedures explicitly provide that if any financial account held by a reportable person who is not a resident of India or by a passive non-financial entity with controlling persons who are reportable persons who are not resident of India is identified, the financial institution shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dollars in assets on its balance sheet, and the financial institution and any related entity, taken together, does not have more than an amount equivalent to five hundred million U.S. dollars in total assets on its consolidated or combined balance sheets; and (v) any related entity must be incorporated or organised in India, and any related entity that is a financial institution, with the exception of any related entity that is a retirement fund referred to in clauses (D) to (G) or a financial institution with only low-value accounts referred to in clause (P), must satisfy the requirements set forth in this clause. Explanation.- Regional Rural Banks constituted under the Regional Rural Bank Act 1976 (21 of 1976), Urban Cooperative Banks constituted under respective State Cooperative Societies Acts or Multi State Cooperative Societies Act, State Cooperative Banks or District Central Cooperative Banks constituted under respective State Cooperative Societies Act and Local Area Banks licensed under the Banking Regulations Act, 1949 (10 of 1949) and regulated and registered as public limited companies under the Companies Act, 1956 (1 of 1956) or Companies Act, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution shares a common electronic account system with the sponsoring entity that enables the sponsoring entity to identify all account holders and payees of the financial institution and to access all account and customer information maintained by the financial institution including, but not limited to, customer identification information, customer documentation, account balance, and all payments made to the account holder or payee, and that complies with the following requirements namely:- (I) the sponsoring entity is authorised to act on behalf of the financial institution (such as a fund manager, trustee, corporate director, or managing partner) to fulfil applicable registration requirements of the United States of America; (II) the sponsoring entity has registered as a sponsoring entity with the United States of America; (III) if the sponsoring entity identifies any U.S. reportable account with respect to the financial institution, the sponsoring entity registers the financial institution pursuant to applicable registration requirements of the United States of America on or before the 31st December, 2015 or the date tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion described in this clause); and (v) the sponsoring entity complies with the following requirements, namely:- (a) it has been registered as a sponsoring entity in terms of the Foreign Account Tax Compliance Act of the United States of America; (b) the sponsoring entity agrees to perform, on behalf of the financial institution, all due diligence, withholding, reporting, and other requirements that the financial institution would have been required to perform if it were a reporting financial institution and retains documentation collected with respect to the financial institution for a period of six years; (c) the sponsoring entity identifies the financial institution in all its reporting completed on the financial institution's behalf; and (d) the sponsoring entity has not had its status as a sponsor revoked; (6) reportable account means a financial account which has been identified, pursuant to the due diligence procedures provided in rule 114H, as held by,- (a) a reportable person; or (b) an entity, not based in United Sates of America, with one or more controlling persons that is a specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial institution in the past five years, and is in the process of liquidating its assets or is reorganising with intent to continue or recommence operations in a business other than that of a financial institution; or (vii) the entity primarily engages in financing and hedging transactions with, or for, related entities which are not financial institutions, and does not provide financing or hedging services to any entity which is not a related entity, provided that the group of any such related entities is primarily engaged in a business other than that of a financial institution; or (viii) the entity fulfils all of the following requirements, namely:- (a) it is established and operated in India exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in India and it is a professional organisation, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league or an organisation operated exclusively for the promotion of social welfare; (b) it is exempt from income-tax in India; (c) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries or class of beneficiaries, and any other natural person exercising ultimate effective control over the trust, and in the case of a legal arrangement other than a trust, the said expression means the person in equivalent or similar position; (C) non-financial entity means any entity that is not a financial institution; (D) passive non-financial entity means,- (i) any non-financial entity which is not an active non-financial entity; or (ii) an investment entity described in sub-clause (B) of clause (c) of the Explanation to clause (3); or (iii) a withholding foreign partnership or withholding foreign trust; (E) an entity is a related entity of another entity if either entity controls the other entity, or the two entities are under common control. Explanation.- For the purpose of this clause control includes direct or indirect ownership of more than fifty per cent. of the votes and value in an entity; (F) passive income includes income by way of,- (i) dividends; (ii) interest; (iii) income equivalent to interest; (iv) rents and royalties (other than rents an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s,- (a) an individual, being a citizen or resident of the United States of America ; (b) a partnership or corporation organized in the United States of America or under the laws of the United States of America or any State thereof; (c) a trust if,- (i) a court within the United States of America would have authority under applicable law to render orders or judgments concerning substantially all issues regarding administration of the trust; and (ii) one or more U.S. persons have the authority to control all substantial decisions of the trust; or (d) an estate of a decedent who was a citizen or resident of the United States of America; (11) U.S. reportable account means a financial account maintained by a reporting financial institution and, pursuant to the due diligence procedures provided in rule 114H, is identified to be held by one or more specified U.S. persons or by an entity not based in the United States of America with one or more controlling persons which is a specified U.S. Person; (12) U.S. source withholdable payment means any payment of interest (including any original issue disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the end of relevant calendar year or, if the account was closed during such year, immediately before closure; (e) in the case of any custodial account,- (i) the total gross amount of interest, the total gross amount of dividends, and the total gross amount of other income generated with respect to the assets held in the account, in each case paid or credited to the account (or with respect to the account) during the calendar year; and (ii) the total gross proceeds from the sale or redemption of financial assets paid or credited to the account during the calendar year with respect to which the reporting financial institution acted as a custodian, broker, nominee, or otherwise as an agent for the account holder; (f) in the case of any depository account, the total gross amount of interest paid or credited to the account during the relevant calendar year; (g) in the case of any account other than that referred to in clauses (e) or (f), the total gross amount paid or credited to the account holder with respect to the account during the relevant calendar year with respect to which the reporting financial institution is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary, the account holder is any person named as the owner in the contract and any person with a vested entitlement to payment under the terms of the contract; (b) taxpayer identification number means a number assigned to a person in the country or territory in which he is resident for tax purposes and includes a functional equivalent in case no such number is assigned. (3) Where the person is a resident of more than one country or territory outside India under the tax laws of such country or territory, the reporting financial institution shall maintain the taxpayer identification number in respect of each such country or territory. (4) Notwithstanding anything contained in sub-rule (1), with respect to each reportable account which is a pre-existing account, the taxpayer identification number or date of birth is not required to be reported if such taxpayer identification number or date of birth is not in the records of the reporting financial institution: Provided that the reporting financial institution shall obtain the taxpayer identification number and date of birth with respect to pre-existing accounts by the 31st December, 2016 and shall repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies. (10) (a) Every reporting financial institution shall communicate to the Principal Director General of Income-tax (Systems) the name, designation and communication details of the Designated Director and the Principal Officer and obtain a registration number; (b) The statement referred to in sub-rule (7) shall be signed, verified and furnished by the Designated Director of the reporting financial institution on the basis of information available with the institution: Provided that where the reporting financial institution is a non-resident, the statement may be signed, verified and furnished by a person who holds a valid power of attorney from such Designated Director; (c) It shall be the duty of every reporting financial institution, its Designated Director, Principal Officer and employees to observe the procedure and the manner of maintaining information as specified by its regulator. Explanation.- For the purposes of this sub-rule,- (a) Designated Director means a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule (3) to sub-rule (8) and, unless otherwise provided, information with respect to a reportable account shall be reported annually in the calendar year following the calendar year to which the information relates. (2) For the purpose of this rule,- (a) documentary evidence includes any of the following, namely:- (i) a certificate of residence issued by an authorised Government body, including a Government agency or a municipality, of the country or territory in which the payee claims to be a resident; (ii) with respect to an individual, any valid identification issued by an authorized Government body, including a Government agency or a municipality, that includes the individual's name and is particularly used for identification purposes; (iii) with respect to an entity, any official documentation issued by an authorized Government body, including a Government agency or a municipality, which includes the name of the entity and either the address of its principal office in the country or territory in which it claims to be a resident or the country or territory in which the entity was incorporated or organized; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin that calendar year. (3) The due diligence procedure for the purposes of identifying reportable accounts among pre-existing individual accounts shall be the following, namely:- (a) a pre-existing individual account is not required to be reviewed, identified or reported, if,- (i) in case of a U.S. reportable account,- (A) the balance or value as on the 30th June, 2014, does not exceed an amount equivalent to fifty thousand U.S. dollars, subject to sub-clause (vi) of clause (c) of this sub-rule; or (B) which is a cash value insurance contract or an annuity contract, the balance or value does not exceed an amount equivalent to two hundred and fifty thousand U.S. dollars as on the 30th June, 2014, subject to sub-clause (vi) of clause (c) of this sub-rule; or (C) which is a cash value insurance contract or an annuity contract, the reporting financial institution, under any other law for the time being in force in India or of the United States of America, is prevented from selling such contract to a person who is a resident of the United States of America; (ii) in case of other rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicium is identified, unless it elects to apply sub-clause (v) and one of the exceptions in the said sub-clause applies with respect to that account; (iv) if a hold mail instruction or in-care-of address is discovered in the electronic search and no other address and none of the other indicia listed in items (A) to (E) of sub-clause (i) are identified for the account holder, the reporting financial institution shall apply the paper record search referred to in sub-clause (ii) of clause (c), or seek to obtain from the account holder a self-certification or documentary evidence to establish the residence or residences for tax purposes of such account holder: Provided that if the paper search fails to establish an indicium and the attempt to obtain the self-certification or documentary evidence is not successful, the reporting financial institution shall report the account as an undocumented account; (v) notwithstanding a finding of indicia under sub-clause (i), a reporting financial institution is not required to treat an account holder as a resident, for tax purposes,- (A) of United States of America if, the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, or has previously reviewed and maintains a record of- (I) a self-certification from the account holder of the country or territory or countries or territories of residence of such account holder that does not include any country or territory outside India; or (II) documentary evidence establishing the account holder's non-reportable status; (c) with respect to high value accounts among pre-existing individual accounts the following enhanced review procedures shall apply, namely:- (i) the reporting financial institution must review electronically searchable data maintained by the reporting financial institution for any of the indicia described in sub-clause (i) of clause (b); (ii) if the reporting financial institution's electronically searchable databases do not capture all of the information referred to in sub-clause (iii) of this clause, then the reporting financial institution shall also review the current customer master file and, to the extent not contained in the current customer master file, the following documents associated with the account and obtained by the reporting financial institu ..... 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(including any financial accounts aggregated with that high value account) if the relationship manager has actual knowledge that the account holder is a reportable person; (v) after application of review procedures specified in sub-clauses (i) to (iv) if,- (A) none of the indicia referred to in sub-clause (i) of clause (b) are discovered, and the account is not identified as held by a reportable person as per sub-clause (iv), then further action is not required until there is a change in circumstances which results in one or more indicia being associated with the account; (B) any of the indicia referred to in items (A) to (E) of sub-clause (i) of clause (b) are discovered, or if there is a subsequent change in circumstances which results in one or more indicia being associated with the account, then the reporting financial institution shall treat the account as a reportable account with respect to each country or territory outside India for which an indicium is identified unless it elects to apply sub-clause (v) of clause (b) and one of the exceptions in the said sub-clause applies with respect to that account; (C) a hold mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o each such country or territory outside India for which an indicium is identified unless it elects to apply sub-clause (v) of clause (b) and one of the exceptions in the said sub-clause applies with respect to that account; (ix) a reporting financial institution shall implement procedures to ensure that a relationship manager identifies any change in circumstances of an account and where the relationship manager is informed that the account holder has a new mailing address in any country or territory outside India, the reporting financial institution is required to treat the new address as a change in circumstances and, if it elects to apply sub-clause (v) of clause (b), then it is required to obtain the appropriate documentation from the account holder; (d) review of pre-existing individual account,- (i) in case of a U.S. reportable account which is high value account as on the 30th June, 2014, shall be completed by the 31st December, 2015 and if based on this review such account is identified as a U.S. reportable account after the 31st December, 2014 and on or before the 31st December, 2015, the reporting financial institution is not required to repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documentation collected in accordance with Prevention of Money-laundering (Maintenance of Records) Rules, 2005; (c) where the self-certification obtained under clause (b) of this sub-rule establishes that the account holder is resident for tax purposes in a country or territory outside India, the reporting financial institution shall treat the account as a reportable account and the self-certification shall also include the account holder's taxpayer identification number with respect to such country or territory outside India, subject to sub-rule (5) of rule 114G, and date of birth; (d) where a self-certification has been obtained under clause (b) of this sub-rule for a new individual account and if there is a change of circumstances with respect to such account which causes the reporting financial institution to know, or have reason to know, that the said self-certification is incorrect or unreliable, the reporting financial institution shall not rely on the said self-certification and shall obtain a valid self-certification that establishes the residence or residences for tax purposes of the account holder: Provided that if the reporting fi ..... 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Provided that the accounts held by non-participating financial institutions for which aggregate payments as provided in clause (h) of sub-rule (1) of rule 114G are reported shall be treated as reportable accounts; (d) for pre-existing entity accounts referred to in clause (b) with respect to which reporting is required, a reporting financial institution, to determine whether the account is held by one or more reportable persons, or by a passive non-financial entity with one or more controlling persons who are reportable persons, or by non-participating financial institutions, shall apply the following review procedures namely:- (i) to determine whether the entity is a reportable person, the reporting financial institution shall,- (A) review information maintained for regulatory or customer relationship purposes (including information collected in accordance with the rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003)) to determine whether the information indicates that the account holder is a reportable person. Explanation.- For the purpose of this sub-clause, information indicating that the account holder is a residen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial institution shall obtain a self-certification from the account holder to establish its status, unless it has information in its possession or which is publicly available, based on which it can reasonably determine that the account holder is an active non-financial entity or a financial institution other than an investment entity referred to in sub-clause (B) of clause (c) of Explanation to clause (3) of rule 114F; (B) for purposes of determining the controlling persons of an account holder, a reporting financial institution may rely on information collected and maintained in accordance with the rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003); (C) for purposes of determining whether a controlling person of a pre-existing account of passive non-financial entity is a reportable person, a reporting financial institution may rely on,- (I) information collected and maintained in accordance with rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003) in the case of pre-existing entity account held by one or more non-financial entity with an aggregate balance or value which does not exceed an amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es namely:- (i) determine whether the entity is a reportable person and for that the reporting financial institution shall,- (A) obtain a self-certification, which may be part of the account opening documentation, that allows the reporting financial institution to determine the account holder's residence or residences for tax purposes and confirm the reasonableness of such self-certification based on the information obtained by the reporting financial institution in connection with the opening of the account, including any documentation collected in accordance with the rules made under the Prevention of Money-laundering Act, 2002 (15 of 2003): Provided that if the entity certifies that it has no residence for tax purposes, the reporting financial institution may rely on the address of the principal office of the entity to determine the residence of the account holder; (B) treat the account as a reportable account, if the information as per item (A) indicates that the account holder is a reportable person, unless it reasonably determines based on information in its possession or which is publicly available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that an individual beneficiary (other than the owner) of a cash value insurance contract or an annuity contract receiving a death benefit is not a reportable person and may treat such financial account as other than a reportable account unless the reporting financial institution has actual knowledge, or reason to know, that the beneficiary is a reportable person: Provided that if a reporting financial institution has actual knowledge, or reason to know, that the beneficiary is a reportable person, it shall follow the procedures specified in clause (b) of sub-rule (3); Explanation.- For the purposes of this clause, a reporting financial institution shall be deemed to have reason to know that a beneficiary of a cash value insurance contract or an annuity contract is a reportable person if the information collected by the reporting financial institution and associated with the beneficiary contains indicia specified in clause (b) of sub-rule (3). (c) the following procedures relating to aggregation of account balance and currency shall apply, namely:- (i) for purposes of determining the aggregate balance or value of financial acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in sub-rule (4) or sub-rule (6) of this rule for new accounts, the reporting financial institution may, in lieu of the procedures specified in the said sub-rules, apply the following alternative procedures, namely:- (a) within one year after the date of entry into force of the FATCA agreement, reporting financial institutions shall,- (i) with respect to a new individual account opened on or after the 1st July, 2014 but before the date of entry into force of FATCA agreement, request the self-certification specified in sub-rule (4) and confirm the reasonableness of such self-certification consistent with the procedures specified in sub-rule (4); and (ii) with respect to a new entity account opened on or after the 1st July, 2014 but before the date of entry into force of FATCA agreement, perform the due diligence procedures specified in sub-rule (6) and request for information as necessary to document the account, including any self-certification, required under sub-rule (6); (b) the reporting financial institution shall report on any new account which is identified pursuant to clause (a) of this sub-rule as a U.S. reportable acc ..... 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