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The following Entities shall be treated as exempt beneficial owners or deemed-compliant FFIs

Annex II - Agreement between the Government of the Republic of India and the Government of the United States of America - DTAA - Annex II - Annex II , as the case may be, and the following accounts are excluded from the definition of Financial Accounts. This Annex II may be modified by a mutual written decision entered into between the Competent Authorities of India and the United States: (1) to include additional Entities and accounts that present a low risk of being used by U.S. Persons to eva .....

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ed in the mutual agreement or arrangement described in paragraph 6 of Article 3 of the Agreement. I. Exempt Beneficial Owners other than Funds. The following Entities shall be treated as Non-Reporting Indian Financial Institutions and as exempt beneficial owners for purposes of sections 1471 and 1472 of the U.S. Internal Revenue Code, other than with respect to a payment that is derived from an obligation held in connection with a commercial financial activity of a type engaged in by a Specified .....

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Indian Governmental Entity"). This category is comprised of the integral parts, controlled entities, and political subdivisions of India. 1. An integral part of India means any person, organization, agency, bureau, fund, instrumentality, or other body, however designated, that constitutes a governing authority of India. The net earnings of the governing authority must be credited to its own account or to other accounts of India, with no portion inuring to the benefit of any private person. .....

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accounts of one or more Indian Governmental Entities, with no portion of its income inuring to the benefit of any private person; and c) The Entity s assets vest in one or more Indian Governmental Entities upon dissolution. 3. Income does not inure to the benefit of private persons if such persons are the intended beneficiaries of a governmental program, and the program activities are performed for the general public with respect to the common welfare or relate to the administration of some phas .....

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ational organization) (1) that is comprised primarily of non-U.S. governments; (2) that has in effect a headquarters agreement with India; and (3) the income of which does not inure to the benefit of private persons. C. Central Bank. An institution that is by law or government sanction the principal authority, other than the government of India itself, issuing instruments intended to circulate as currency. Such an institution may include an instrumentality that is separate from the government of .....

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rives from sources within the United States (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. B. Broad Participation Retirement Fund. A fund established in India to provide retirement, disability, or death benefits, or any combination thereof, to beneficiaries that are current or former employees (or pers .....

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under the laws of India due to its status as a retirement or pension plan; b) The fund receives at least 50 percent of its total contributions (other than transfers of assets from other plans described in paragraphs A through D of this section or from retirement and pension accounts described in subparagraph A(1) of section V of this Annex II) from the sponsoring employers; c) Distributions or withdrawals from the fund are allowed only upon the occurrence of specified events related to retireme .....

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annually, applying the rules set forth in Annex I for account aggregation and currency translation. C. Narrow Participation Retirement Fund. A fund established in India to provide retirement, disability, or death benefits to beneficiaries that are current or former employees (or persons designated by such employees) of one or more employers in consideration for services rendered, provided that: 1. The fund has fewer than 50 participants; 2. The fund is sponsored by one or more employers that are .....

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assets; and 5. The fund is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in India. D. Pension Fund of an Exempt Beneficial Owner. A fund established in India by an exempt beneficial owner to provide retirement, disability, or death benefits to beneficiaries or participants that are current or former employees of the exempt beneficial owner (or persons designated by such employees), or that are not current or for .....

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nstitution (with respect to a loan made to such Entity) or an exempt beneficial owner. F. Regimental Fund or Non-public Fund of the Armed Forces. 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 section 10(23AA) of the Indian Income-tax Act of 1961. G. Employees State Insurance Fund. A fund established in India as an Employee .....

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t of 1952 or the Employees Provident Funds and Miscellaneous Act of 1952 to provide current and former employees of Indian employers retirement benefits in consideration for services rendered, provided that fund: 1. Does not have a single beneficiary with a right to more than five percent of the fund s assets; 2. Is subject to government regulation and provides annual information reporting about its beneficiaries to the relevant tax authorities in India; 3. The fund is generally exempt from tax .....

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ns are Non-Reporting Indian Financial Institutions that shall be treated as deemed-compliant FFIs for purposes of section 1471 of the U.S. Internal Revenue Code. A. Financial Institution with a Local Client Base. A Financial Institution satisfying the following requirements: 1. The Financial Institution must be licensed and regulated as a financial institution under the laws of India; 2. The Financial Institution must have no fixed place of business outside of India. For this purpose, a fixed pl .....

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y indicate that the Financial Institution provides Financial Accounts or services to nonresidents, and does not otherwise target or solicit U.S. customers or Account Holders, or (b) advertises in print media or on a radio or television station that is distributed or aired primarily within India but is also incidentally distributed or aired in other countries, provided that the advertisement does not specifically indicate that the Financial Institution provides Financial Accounts or services to n .....

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residents (including residents that are Entities) of India; 6. Beginning on or before July 1, 2014, the Financial Institution must have policies and procedures, consistent with those set forth in Annex I, to prevent the Financial Institution from providing a Financial Account to any Nonparticipating Financial Institution and to monitor whether the Financial Institution opens or maintains a Financial Account for any Specified U.S. Person who is not a resident of India (including a U.S. Person tha .....

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, the Financial Institution must report such Financial Account as would be required if the Financial Institution were a Reporting Indian Financial Institution (including by following the applicable registration requirements on the IRS FATCA registration website) or close such Financial Account; 8. With respect to a Preexisting Account held by an individual who is not a resident of India or by an Entity, the Financial Institution must review those Preexisting Accounts in accordance with the proce .....

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t is a Financial Institution must be incorporated or organized in India and, with the exception of any Related Entity that is a retirement fund described in paragraphs A through D of section II of this Annex II, satisfy the requirements set forth in this paragraph A; and 10. The Financial Institution must not have policies or practices that discriminate against opening or maintaining Financial Accounts for individuals who are Specified U.S. Persons and residents of India. B. Local Bank. A Financ .....

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ization, members, provided that no member has a greater than five percent interest in such credit union or cooperative credit organization; 3. The Financial Institution satisfies the requirements set forth in subparagraphs A(2) and A(3) of this section, provided that, in addition to the limitations on the website described in subparagraph A(3) of this section, the website does not permit the opening of a Financial Account; 4. The Financial Institution does not have more than $175 million in asse .....

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alue accounts described in paragraph C of this section, must satisfy the requirements set forth in this paragraph B. C. Financial Institution with Only Low-Value Accounts. An Indian Financial Institution satisfying the following requirements: 1. The Financial Institution is not an Investment Entity; 2. No Financial Account maintained by the Financial Institution or any Related Entity has a balance or value in excess of $50,000, applying the rules set forth in Annex I for account aggregation and .....

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s that accepts deposits only when a customer makes a payment in excess of a balance due with respect to the card and the overpayment is not immediately returned to the customer; and 2. Beginning on or before July 1, 2014, the Financial Institution implements policies and procedures to either prevent a customer deposit in excess of $50,000, or to ensure that any customer deposit in excess of $50,000, in each case applying the rules set forth in Annex I for account aggregation and currency transla .....

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section 1471 of the U.S. Internal Revenue Code. In addition, paragraph F of this section provides special rules applicable to an Investment Entity. A. Trustee-Documented Trust. A trust established under the laws of India to the extent that the trustee of the trust is a Reporting U.S. Financial Institution, Reporting Model 1 FFI, or Participating FFI and reports all information required to be reported pursuant to the Agreement with respect to all U.S. Reportable Accounts of the trust. B. Sponsor .....

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and (b) an Entity has agreed with the Financial Institution to act as a sponsoring entity for the Financial Institution. 2. A Financial Institution is a sponsored controlled foreign corporation if (a) the Financial Institution is a controlled foreign corporation (A "controlled foreign corporation" means any foreign corporation if more than 50 percent of the total combined voting power of all classes of stock of such corporation entitled to vote, or the total value of the stock of such .....

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ermediary, withholding foreign partnership, or withholding foreign trust pursuant to relevant U.S. Treasury Regulations; (b) the Financial Institution is wholly owned, directly or indirectly, by a Reporting U.S. Financial Institution that agrees to act, or requires an affiliate of the Financial Institution to act, as a sponsoring entity for the Financial Institution; and (c) the Financial Institution shares a common electronic account system with the sponsoring entity that enables the sponsoring .....

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d manager, trustee, corporate director, or managing partner) to fulfill applicable registration requirements on the IRS FATCA registration website; b) The sponsoring entity has registered as a sponsoring entity with the IRS on the IRS FATCA registration website; c) If the sponsoring entity identifies any U.S. Reportable Accounts with respect to the Financial Institution, the sponsoring entity registers the Financial Institution pursuant to applicable registration requirements on the IRS FATCA re .....

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dentifying number of the Financial Institution (obtained by following applicable registration requirements on the IRS FATCA registration website) in all reporting completed on the Financial Institution s behalf; and f) The sponsoring entity has not had its status as a sponsor revoked. C. Sponsored, Closely Held Investment Vehicle. An Indian Financial Institution satisfying the following requirements: 1. The Financial Institution is a Financial Institution solely because it is an Investment Entit .....

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r requirements that the Financial Institution would have been required to perform if it were a Reporting Indian Financial Institution; 3. The Financial Institution does not hold itself out as an investment vehicle for unrelated parties; 4. Twenty or fewer individuals own all of the debt interests and Equity Interests in the Financial Institution (disregarding debt interests owned by Participating FFIs and deemed-compliant FFIs and Equity Interests owned by an Entity if that Entity owns 100 perce .....

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on would have been required to perform if it were a Reporting Indian 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 reporting completed on the Financial Institution s behalf; and d) The sponsoring entity has not had its status as a sponsor revoked. D. Investment Advisors and Investment Managers and Stock Brokers/Trading Members of Recognized Stock E .....

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tment Entity established in India that is regulated as a collective investment vehicle, provided that all of the interests in the collective investment vehicle (including debt interests in excess of $50,000) are held by or through one or more exempt beneficial owners, Active NFFEs described in subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial Institutions that are not Nonparticipating Financial Institutions. F. Special Rules. The following .....

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hicle, all of the interests in which (including debt interests in excess of $50,000) are held by or through one or more exempt beneficial owners, Active NFFEs described in subparagraph B(4) of section VI of Annex I, U.S. Persons that are not Specified U.S. Persons, or Financial Institutions that are not Nonparticipating Financial Institutions; or b) An Investment Entity that is a qualified collective investment vehicle under relevant U.S. Treasury Regulations; the reporting obligations of any In .....

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med fulfilled if the information required to be reported by the first-mentioned Investment Entity pursuant to the Agreement with respect to such interests is reported by such Investment Entity or another person. V. Accounts Excluded from Financial Accounts. The following accounts are excluded from the definition of Financial Accounts and therefore shall not be treated as U.S. Reportable Accounts. A. Certain Savings Accounts. 1. Retirement and Pension Account. A retirement or pension account main .....

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e account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate); c) Annual information reporting is required to the tax authorities in India with respect to the account; d) Withdrawals are conditioned on reaching a specified retirement age, disability, or death, or penalties apply to withdrawals made before such specified events; and e) Either (i) annual contributions are limited to $50,000 or less, or (ii) there is a maximum .....

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tions to the account that would otherwise be subject to tax under the laws of India are deductible or excluded from the gross income of the account holder or taxed at a reduced rate, or taxation of investment income from the account is deferred or taxed at a reduced rate); iii. Withdrawals are conditioned on meeting specific criteria related to the purpose of the savings account (for example, the provision of educational or medical benefits), or penalties apply to withdrawals made before such cr .....

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90, provided that the contract satisfies the following requirements: 1. Periodic premiums, which do not decrease over time, are payable at least annually during the period the contract is in existence or until the insured attains age 90, whichever is shorter; 2. The contract has no contract value that any person can access (by withdrawal, loan, or otherwise) without terminating the contract; 3. The amount (other than a death benefit) payable upon cancellation or termination of the contract canno .....

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ed s will or death certificate. D. Escrow Accounts. An account maintained in India established in connection with any of the following: 1. A court order or judgment. 2. A sale, exchange, or lease of real or personal property, provided that the account satisfies the following requirements: 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 financ .....

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he benefit of the purchaser, seller, lessor, or lessee (including to satisfy such person s obligation) when the property is sold, exchanged, or surrendered, or the lease terminates; d) The account is not a margin or similar account established in connection with a sale or exchange of a financial asset; and e) The account is not associated with a credit card account. 3. An obligation of a Financial Institution servicing a loan secured by real property to set aside a portion of a payment solely to .....

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d oversight under the laws of such other Partner Jurisdiction as if such account were established in that Partner Jurisdiction and maintained by a Partner Jurisdiction Financial Institution in that Partner Jurisdiction. VI. Definitions. The following additional definitions shall apply to the descriptions above: A. Reporting Model 1 FFI. The term Reporting Model 1 FFI means a Financial Institution with respect to which a non-U.S. government or agency thereof agrees to obtain and exchange informat .....

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h the IRS. B. Participating FFI. The term Participating FFI means a Financial Institution that has agreed to comply with the requirements of an FFI Agreement, including a Financial Institution described in a Model 2 IGA that has agreed to comply with the requirements of an FFI Agreement. The term Participating FFI also includes a qualified intermediary branch of a Reporting U.S. Financial Institution, unless such branch is a Reporting Model 1 FFI. For purposes of this definition, the term FFI Ag .....

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ccordance with the requirements of an FFI Agreement, supplemented by the exchange of information between such non-U.S. government or agency thereof and the IRS. MEMORANDUM OF UNDERSTANDING REGARDING 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 FATCA At the signing today of the Agreement Between the Government of the Republic of India and the Government of the United States .....

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2015 with the goal of having the Agreement enter into force by September 30, 2015. Based on this understanding, as of the date of signature of the Agreement, the United States Department of the Treasury intends to continue to treat each Indian Financial Institution, as that term is defined in the Agreement, as complying with, and not subject to withholding under section 1471 of the U.S. Internal Revenue Code during such time as India is pursuing the necessary internal procedures for entry into f .....

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gle premium life insurance contract that does not permit an amount to be paid on surrender or termination of the contract and that does not allow amounts to be borrowed under or with regard to the contract, does not constitute a Cash Value Insurance Contract, as such term is used in the Agreement. In reference to I.C of Annex II of the Agreement (Central Bank), it is understood that the Reserve Bank of India is the Central Bank for purposes of the Agreement. In reference to I.A of Annex II of th .....

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s, with no portion of its income inuring to the benefit of any private person; and c) The Entity s assets vest in one or more Indian Governmental Entities upon dissolution. In reference to VI.B.4(j) of Annex I, it is understood that an Investor Protection Fund, as referred to in Section 10, clause 23EA of the Indian Income-tax Act 1961, a Credit Guarantee Fund Trust for Small Industries as referred to in Section 10, clause 23EB of the Indian Income-tax Act 1961 and an Investor Protection Fund, a .....

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