New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

Guidance Notes on Implementation of Reporting Requirements under Rules 114F to 114H of the Income -Tax Rules

Income Tax - F. NO. 500/137/2011-FTTR-III - Dated:- 31-8-2015 - F. NO. 500/137/2011-FTTR-III GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE FOREIGN TAX AND TAX RESEARCH DIVISION DATED 31-8-2015 1. Introduction 1.1 New Global Standards on Automatic Exchange of Information To combat the problem of offshore tax evasion and avoidance and slashing of unaccounted money abroad requiring cooperation amongst tax authorities, the G20 and OECD countries working together developed a Common Re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ir tax authorities about account holders "resident" in other countries, such information having to be transmitted "automatically" on yearly basis. The information to be exchanged relates not only to individuals but also to shell companies and trusts having beneficial ownership or interest in the "resident" countries. Further, the reporting needs to be done for a wide range of financial products, by a wide variety of financial institutions, including banks, depositor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ens. The provisions of FATCA essentially provide for 30% withholding tax on US source payments made to Foreign Financial Institutions (FIs) unless they enter into an agreement with the Internal Revenue Service (IRS) to provide information about accounts held with them by USA persons or entities (firms/companies/trusts) controlled by USA persons. Since domestic laws of sovereign countries, (including India), may not permit sharing of client confidential information by FIs directly with USA. USA h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndia and USA is available at http://www.incometaxindia.gov.in/Lists/Press%20Releases/Attachments/375/india/iga/final-india_english.pdf. 1.3 Commitment to Implement CRS on AEOI In keeping with its leadership role in developing the new global standards. India is one of the early adopters of the CRS and has committed to exchange information automatically by 2017 as under : First exchange in September, 2017 for new accounts (both individuals and entity) opened after 1.1.2016 and for pre-existing (as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

58 of them from 2017 and the balance 35 from 2018. 61 of the 93 jurisdictions have also joined the MCAA. Table in Annexure provides a list of the 93 jurisdictions and the time for exchanging information. 1.4 Steps taken for Implementation of CRS on AEOI and IGA In view of our commitment to implement the CRS on AEOI and also the IGA, with USA and with a view to provide information to other countries, necessary legislative changes have been made through Finance (No. 2) Act, 2014, by amending secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

possible. A copy of the Notification No. 62 of 2015 modifying the Income-tax Rules, 1962. is at http://www.incometaxindia.gov.in/communications/notification/notification%20no.%2062%20dated%2007-08-2015.pdf. 1.5 Purpose of the Guidance Note The purpose of this Guidance Note is to provide guidance to the Financial Institutions. Regulators and officers of the Tax Department for ensuring compliance with the reporting requirements provided in Rules 114F to 114H and Form 61B of the Income-tax Rules, 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Guidance Note can be issued before 1st January, 2016, when most of the reporting requirements will commence including Frequently Asked Questions (FAQs). 2. Reporting Financial Institutions 2.1 Introduction Rule 114G(1) casts an obligation on "Reporting Financial Institutions" to maintain and report certain information in respect of each ''Reportable Account". "Reporting Financial Institution" is defined in Rule 114F (7) to mean (a) a financial institution (other .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a Financial Institution? Step 3: Is the Financial Institution in India? Step 4: Is the Financial Institution a Non-Reporting Financial Institution? 2.2 Step 1: Is it an Entity? Only Entities can be RFIs. The term "Entity" would include legal persons and legal arrangements, such as corporations, partnerships, trusts, and foundations. Individuals, including sole proprietorships, are therefore not RFIs. (Ref: Page 60 of CRS and 201 of Commentary) 2.3 Step 2: Is the Entity a Financial Ins .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

equals or exceeds 20% 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. Entities that safe keep Financial Assets for the account of others, such as custodian banks, brokers and central securities depositories, would generally be considered Custodial Institutions. (Ref: Page 44 of CRS and 160 of Commentary) 2.3.2 Depository Institution Explanation (b) to Rule 114F(3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sions of credit; (b) purchases, sells, discounts, or negotiates accounts receivable, instalment obligations, notes, drafts, cheques, bills of exchange, acceptances, or other evidences of indebtedness; (c) issues letters of credit and negotiates drafts drawn thereunder; (d) provides trust or fiduciary services; (e) finances foreign exchange transactions; or (f) enters into, purchases, or disposes of finance leases or leased assets. Savings banks, commercial banks, savings and loan associations, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

change; exchange, interest rate and index instruments; transferable securities; or commodity futures trading; or individual and collective portfolio management; or otherwise in vesting, administering, or managing financial assets or money on behalf of other persons; ♦ Entities whose gross income is primarily attributable to investing, reinvesting, or trading in financial assets, if the said entity is managed by another entity that is a depository institution, a custodial institution, an in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Rule 114F(1) is defined to mean 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 US$ 50,000. 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 cas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ustees resident in India, unless the required information is being reported elsewhere because the trust is treated as resident there. (Ref: Page 44 of CRS and 158 of Commentary) 2.5 Step 4: Is the Financial Institution a Non-Reporting Financial Institution? Rule 114F(5) specifies a number of entities as non-reporting financial institutions and these entities are not required to maintain or report the information, except in case of "financial institution with a local client base" in cer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s an Indian financial institution only because it is an investment entity. provided that each direct holder of an equity interest in the entity is a financial institution referred to in sub-clauses (a) to (c); (e) a qualified credit card issuer; (f) an investment entity established in India that is a financial institution only because it (i) renders investment advice to, and acts on behalf of; or (ii) manages portfolios for. and acts on behalf of; or (iii) executes trades on behalf of, a custome .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the trust; (i) a financial institution with a local client base; (j) a local bank; (k) a financial institution with only low-value accounts; (l) sponsored investment entity and controlled foreign corporation, in case of any U.S. reportable account; (m) sponsored closely hold investment vehicle, in case of any U.S. reportable account. Explanation to Rule 114F(5) provide further explanation of the above categories of non-reporting financial institutions. (Ref: Page 45 of CRS and 166 of Comment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntermediaries in order to ensure compliance with the regulations applicable to them under the National Pension System. Accordingly, the NPS Trust is the RFI and would report the information for the relevant NPS Investors. 3. Accounts which are Financial Accounts and therefore need to be reviewed 3.1 Introduction RFIs are required to review the Financial Accounts they maintain to identify whether any of them need to be reported. The general rule is that a Financial Account is an account maintaine .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tory account" which includes any commercial, checking, savings, time, or thrift account, or an account that is evidenced by a certificate of deposit, thrift certificate, investment certificate, certificate of indebtedness, or other similar instrument maintained by a financial institution in the ordinary course of a banking or similar business and also an amount held by an insurance company pursuant to a guaranteed investment contract or similar agreement to pay or credit interest thereon. ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rson treated as a settlor or beneficiary of all or a portion of the trust, or any other natural person exercising ultimate effective control over the trust. A person will be treated as a beneficiary of a trust if he has the right to receive directly or indirectly a mandatory distribution or may receive, directly or indirectly, a discretionary distribution from the trust. (d) any cash value insurance contract and any annuity contract issued or maintained by a financial institution, other than a n .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

accounts satisfying certain conditions Explanation (h)(i) to Rule 114F(1) (ii) Non-retirement tax favoured accounts subject to regulations and satisfying certain conditions Explanation (h)(ii) to Rule 114F(1) (iii) Account established under the Senior Citizens Savings Scheme Rules Explanation (h)(iii) to Rule 114F(1) (iv) Term Life Insurance contracts satisfying certain conditions Explanation (h)(iv) to Rule 114F (1) (v) Accounts held by Estates Explanation (h)(v) to Rule 114F(1) (vi) Escrow Ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ether any of them are Reportable Accounts. Where they are found to be Reportable Accounts information in relation to those accounts must be reported. In general terms, a Reportable Account means an account, which has been identified pursuant to the due diligence procedure prescribed in Rule 114H, as held by one or more Reportable Persons or by a Passive Non-Financial Entity with one or more Controlling Persons that is a Reportable Person. Thus, an account can be Reportable Account by virtue of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

country or territory outside India under the tax laws of such country or territory other than prescribed entities The U.S. person includes an individual being a citizen or resident of USA, a partnership or corporation organized in the USA, US trusts etc. In ease of USA, an individual account holder who is a citizen or resident of USA is a US reportable account and the account of a US entity which is a specified US person is a US reportable account. In case of other reportable accounts, the accou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ertain whether the Controlling Persons of such Entities are residents of countries/territories outside India. If this test is satisfied, the accounts would be Reportable Account. 4.3.2 In case of USA, these reportable accounts by virtue of Rule 114F(6)(b) would be accounts held by an entity, not based in USA, with one or more controlling person that is a specified U.S. person. The specified U.S. person is defined in Rule 114F(9) as a U.S. person other than persons exempted under sub-clauses (i) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

account. 4.3.3 In the ease of other countries/territories, these reportable accounts by virtue of Rule 114F(6)(c) would be accounts held by a Passive Non-Financial Entity (NFE) with one or more controlling persons resident of a country/territory outside India. 4.3.4 Passive NFE is defined in Explanation (D) to Rule 114F(6) as any non-financial entity which is not Active NFE, an investment entity or a withholding partnership or withholding foreign trust. Active NFE has been defined in Explanation .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be applied, namely:- (i) DBOD.AML.BC. No. 71/14.01.001/2012-13, issued on the 18th January, 2013 by the Reserve Bank of India; or (ii) CIR/MIRSD/2/2013, issued on the 24th January, 2013 by the Securities and Exchange Board of India; or (iii) IRDA/SDD/GLD/CIR/019/02/2013, issued on the 4th February, 2013 by the Insurance Regulatory and Development Authority. It has also been specified that in the case of a trust, the controlling person means the settlor, the trustees, the protector (if any), the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tside India which the controlling person is a tax resident of. The details of the controlling person(s) will also be reportable to the respective country(ies) or territory(ies) outside India. (Ref: Page 57 of CRS and 195 of Commentary) 5. Due Diligence Procedure 5.1 Introduction The RFIs need to identify the Reportable Accounts by carrying out due diligence procedures. There are different rules for accounts held by individuals and Entities as well as for Pre-existing and New Accounts, reflecting .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1961. This is particularly the case for Pre-existing Accounts where it is more challenging and costly for Financial Institutions to obtain new information from the Account Holder, 5.2 Split between Pre-existing Accounts and New Accounts 5.2.1 There are separate due diligence procedure for Preexisting and New Accounts and thus the date from which the procedure for New Accounts become applicable is critical. Generally from this date, persons opening New Accounts will be required to provide additio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y. 2014 to the date of entry into force of the IGA between India and USA., i.e., 31st August, 2015, there is an alternate procedure for due diligence prescribed in Rule 114H(8). As per this alternate procedure, the self-certification required for New Accounts should be obtained within one year of entry into force of the IGA, i.e., by 31st August, 2016 and if it is not obtained, the accounts need to be closed. 5.3 Due Diligence for Pre-existing Individual Accounts 5.3.1 The following pre-existing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ny other law for the time being in force in India or of the USA, is prevented from selling such contract to a person who is resident of the USA. ♦ In case of other reportable accounts [Rule 114H(3)(a)(ii)] 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, is prevented from selling such contract to a person who is not a resident of India for tax purposes. 5.3.2 There are separate du .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lue account is defined in Rule 114H(2)(c) as In case of U.S. reportable accounts, balance or value exceeds an amount equal to US$ 50,000 but does not exceed an amount equal to one million dollars as on 30th June, 2014 or 31st December of any subsequent year. In case of other reportable accounts, does not exceed an amount equal to one million dollars as on 31st December, 2015 or 31st December of any subsequent year. 5.3.3 The due diligence procedure for lower value pre-existing individual account .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ory outside India and no telephone number in India; or standing instructions (other than with respect to a depository account) to transfer funds to an account maintained in a country or territory outside India; or currently effective power of attorney or signatory authority granted to a person with an address in a country or territory outside India; or a "hold mail" instruction or "in-care-of" address in a country or territory outside India if the reporting financial institut .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aintains a record of a self-certification from the account holder that it is not resident of a country/territory outside India. documentary evidence establishing the account holder's non-reportable status. 5.3.5 The due diligence procedure for high value pre-existing individual accounts is prescribed in Rule 114H(3)(c) which provides for enhanced review procedures described below: (a) If the electronic searchable information in case of a customer includes the following information, no paper .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an account at another branch of the reporting financial institution or another financial institution); whether there is a current "in-care-of" address or "hold mail" instruction for the account holder; and whether there is any power of attorney or signatory authority for the account. (b) If the electronic searchable data does not contain all of the above information, the Reporting Financial Institution need to review the current customer master file and the documents obtained .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

indicia are discovered or there is change of circumstances, then the RFI shall treat the account as a reportable account with respect to each country or territory outside India for which the indicia is identified unless it obtains a self-certification to establish its residence the only indicia found is a "hold mail" or "in-care" address, special procedures are applied and the RFIs need to complete paper record search or obtain from the account holder a self-certification or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of financial accounts held by an individual, RFI is required to aggregate all financial accounts maintained by it, or by a related entity, but only to the extent that the computerised systems of the RFI links the financial accounts by reference to a data element such as client number or taxpayer identification number, and allows account balances or values to be aggregated. In the case of a high value account the RFIs are also required to aggregate those financial accounts that a relationship m .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

count after 31.12.2014 but before 31.12.2015 the reporting financial institution is not required to report information about such account with respect to calendar year 2014, but shall report information about the account on an annual basis thereafter. (ii) in case of a U.S. reportable account which is low value account as on the 30.6.2014 shall be completed by the 30.6.2016. (iii) in case of other reportable account which is high value account as on the 31.12.2015 shall be completed by the 30.6. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

end of any subsequent calendar year. In case of other reportable accounts if the balance or value as on 31.12.2015 decs not exceed an amount equivalent to US$ 250,000 or the end of any subsequent calendar year. 5.4.2 The reportable accounts would only be those accounts which are held by One or more entities which are reportable persons, or Passive NFEs with one or more controlling persons who are reportable persons For calendar years 2015 and 2016, accounts held by non-participating financial i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eportable person. However, the account may not be treated as a "reportable account", if a self-certification is obtained from the account holder, or if the financial institution reasonably determines based on information in its possession or that is publicly available, that the account holder is not a reportable person. 5.4.4 The account holder will be treated as a non-participating financial institution requiring information to be reported to USA for calendar years 2015 and 2016 if th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

try/territory which has entered into an IGA with USA (a partner jurisdiction FI) but has neither registered with US IRS and obtained a GIIN nor it is a Non-Reporting FI (NRFI). 5.4.5 The Reporting Financial Institution also needs to determine whether the account holder is a Passive NFE and whether its controlling persons are residents of countries/territories outside India as per the following procedure: for purposes of determining whether the account holder is a passive NFE, the reporting finan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rules made under the Prevention of Money-laundering Act, 2002 if the balance does not exceed USD 10,000,00. If it exceeds USD 10,000,00. self-certification from the account holder or such controlling person(s) will be required. If any controlling person of a passive NFE is a resident of any country or territory outside India for tax purposes, the account of the passive NFE shall be treated as a reportable account to all such country or territory outside India which a controlling person is a tax .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

inancial accounts by reference to a data element such as client number or taxpayer identification number, and allows account balances or values to be aggregated. [Rule 114 (7)(c)] 5.4.7 The review of the pre-existing entity accounts with an aggregate balance exceeding US$ 250,000 as on 30.6.2014 in case of U.S. reportable accounts should be completed by 30.6.2016. In case of other reportable accounts with an aggregate balance exceeding US$ 250,000 as on 31.12.2015, the review should be completed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e exemption is not available for U.S. custodial or investment accounts and thus the same need to be reviewed even if the account balance is less than US$ 50,000. Further, there is no threshold in case of other reportable accounts and thus any individual account opened from 1.1.2016 has to be reviewed to ascertain whether it is a reportable account. 5.5.2 In the case of US reportable accounts, not falling under the exemption as above, and in case of other reportable accounts, on account opening, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s, 2005. 5.5.3 Where the self-certification 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 and date of birth, 5.5.4 Where a self-certification has been obtained for a new individual account and if th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n, the reporting financial institution shall treat the account as a reportable account with respect to each such country or territory outside India for which an indicium is identified. (Ref: Page 37 of CRS and 127 of Commentary) 5.6 Due Diligence for New Entity Accounts 5.6.1 There is no threshold or exemption for new entity accounts and all these accounts need to be reviewed and reported. As in the case of pre-existing entity accounts, two-step process need to be adopted as explained below. 5.6 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ccount, including any documentation collected in accordance with Prevention of Money-laundering (Maintenance of Records) Rules, 2005. 5.6.3 The RFI also need to determine whether the account holder is a passive NFE with one or more controlling persons who are reportable persons, i.e., residents of a country/territory outside India, through the following procedure: (a) for purposes of determining whether the account holder is a passive NFE, the reporting financial institution shall rely on a self .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purposes of determining whether a controlling person of a passive non-financial entity is a reportable person, a reporting financial institution may rely on a self-certification from the account holder or such controlling person. 5.6.4 The RFI is also required to determine whether the account holder is a non-participating financial institution and those accounts should be treated as US reportable accounts to be reported to USA for calendar years 2015 and 2016. (Ref: Page 40 of CRS and 143 of Com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the due diligence procedure which has been included in Rule 114H(8) of the Rules. 5.7.2 As provided in Proviso to Rule 114H(8), all the new entity accounts which are U.S. reportable accounts opened from 1st July, 2014 to 31st December, 2014, may be treated by the RFI as pre-existing entity account and apply the due diligence procedure related to pre-existing accounts without regard to account balance or value threshold. 5.7.3 Further, as provided in Rule 114H(8), for all the individual and enti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eportable accounts". 5.7.4 The RFIs will need to report on any new account so identified, including accounts held by non-participating financial institution, by the later of 31st of May following the year on which the account is identified or within 45 days of identification of account. Thus, all accounts identified during the calendar year 2015 should be reported by 31st May, 2016. 5.7.5 The information required to be reported with respect to such a new account shall be information which w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

balance not exceeding US$ 50,000 or cash value insurance contracts having cash value not exceeding USS 50,000 at the end of any calendar year are not required to be reviewed or reported in case of U.S. reportable accounts. Accordingly, in these cases, for the accounts opened from 1.7.2014 to 31.12.2014, a value search should be carried out as on 31.12.2014 and for accounts opened between 1.1.2015 to 31.8.2015, a value search should be carried out as on 31.12.2015. The due diligence for new accou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n cannot be confirmed, the account is reportable. 5.7.7 For new individual accounts (depository or cash value contract) accounts opened after 1.9.2015, the alternate procedure will not be applicable and the due diligence procedure as applicable to "new accounts" including obtaining and verification of self-certification will be applicable. In case of accounts which arc not required to be reviewed or reported as per Rule 114H(4)(a), a value search should be carried out as on 31.12.2015, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cia search a positive match is found with any of the U.S. indicia. If a self-certification is not provided by an account holder or the reasonableness of a self-certification cannot be confirmed, the account is reportable. 5.7.8 For a depository entity account, opened between 1.1.2015 to 31.8.2015, a value search should be carried out as on 31.12.2015 and due diligence as applicable to new accounts including obtaining of self-certification needs to be carried out only in those cases where the val .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rtable Account (a) the name, address, taxpayer identification number (assigned to the account holder by the country or territory of his residence for tax purposes) and date and place of birth (in the case of an individual) of each reportable person, that is an account holder of the account; (b) in the case of any entity which is an account holder and which, after application of due diligence procedures prescribed in rule 114H, is identified as having one or more controlling persons that is a rep .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e of a cash value insurance contract or annuity contract, the cash value or surrender value) 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 acco .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an custodial or depository accounts, including accounts held by investment entities and cash value insurance contract and annuity, 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 the obligor or debtor, including the aggregate amount of any redemption payments made to the account holder during the relevant calendar year; and (h) in the case of any account held b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2015, by an order issued by CBDT on 25th August, 2015. In this statement, only the information referred to in clauses (a) to (d) of Para 7.1 needs to be reported. 6.2.2 The information related to calendar year 2015 also needs to be reported for only US reportable accounts and the statement should be furnished by 31st May, 2016. In this statement, only the information referred to in clauses (a) to (d), e(i) and (f) to (h) of Para 7.1 needs to he reported. 6.2.3 For calendar years 2015 and 2016, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ocedure and in case when no account is identified as reportable account, a Nil statement needs to be furnished. A NIL statement can also be furnished if the RFI has not completed the due diligence procedures. 6.3 Other Issues related to Reporting The following clarifications have been provided in Rule 114G with regard to reporting: (a) "account holder" means the person listed or identified as the holder of a financial account by the financial institution that maintains the account. How .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

beneficiary of the contract and if no person can access the cash value or change the beneficiary, 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; (c) "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. (d) Where the person is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

need to obtain the taxpayer identification number and date of birth with respect to pre-existing accounts by the 31st December, 2016 and shall report it with respect to calendar year 2017 and subsequent years. (f) The taxpayer identification number is not required to be reported if it is not issued by the relevant country or territory or the domestic law of the relevant country or territory does not require the collection of taxpayer identification number. (g) The place of birth is not required .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ccordance with the data structure specified by the Principal Director General of Income-tax (Systems). 7.2 The Principal Director General of Income-tax (Systems) through Notification No. 3/2015, dated 25th August, 2015 has specified the procedures and data structure and standards for ensuring secure capture and transmission of data, which are summarized below: (a) The RFIs are required to get registered with the Income-tax Department by logging in to the e-filing website with the log in ID used .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e downloaded from the e-filing website. The RFI will be required to submit the calendar year for which report is to be submitted and the reporting entity category for which the report is to be submitted. The reporting financial institution will then be provided the options to upload the Form 61B. The Form is required to be submitted using a Digital Signature Certificate. (c) In case Nil statement has to be submitted by the RFI, the option to submit Nil statement is required to be selected. The r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

il statement is required to be submitted with the digital signature certificate of the person authorized to sign the return of income of the RFI. In other cases, the necessary facilities are being developed to enable filing of statement by designated directors who are not authorized to sign the return of income. 8. Monitoring and Compliance 8.1 By Income-tax Department As provided in Rule 114G(9), the statement needs to be furnished to the Directorate of Intelligence and Criminal Investigation a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Section 271FAA of the Income-tax Act, 1961 provides for levy of a penalty of ₹ 50,000 on RFI for furnishing inaccurate information in the statement of reportable account and where (i) inaccuracy is due to failure to comply with due diligence requirements or is deliberate on the part of the RFI. (ii) the RFI knows of the inaccuracy at the time of furnishing the statement of reportable account, but does not inform the Directorate of Intelligence and Criminal Investigation. (iii) the RFI dis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rporating the requirements of reporting and due diligence. (b) providing the procedure and manner of maintaining the information by the reporting financial institution. (c) ensuring the availability of the information with the RFIs for meeting their reporting obligation, it such information is not maintained by it under any rule or regulation issued by the regulator. 8.3 Requirement of obtaining GIIN The RFIs having U.S. Reportable Accounts need to register with the US IRS and obtain Global Inte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ons and suggestions/feedback for the updated version of the Guidance Note, the following officers may be contacted (a) For General Queries Mr. Akhilesh Ranjan, Joint Secretary (FT&TR-I). ranjan.akhilesh@nic.in Mr. Rahul Navin, Director (FT&TR-III), rahul.navin@nic.in Mr. Gaurav Sharma, US (FT&TR-III)(l), us31eoi-dor@nic.in (b) For Systems related Queries Mr. Sanjeev Singh, ADG (Systems-II)), sanjeev.singh@gov.in Mr. Vipul Agarwal, JDIT (Systems), vipul.agarwal@nic.in (Mr. Gaurav Shar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version