CBDT Advises Financial Institutions To Get Self Certification By April 30April 12, 2017 16:54
The Central board of Direct Taxes (CTBT), has advised all the financial institutions (FIs), to get self certification from account holders, by April 30.
This move is enabled to comply with Foreign Accounts Tax Compliance Act (FATCA), and to further prevent blocking of accounts.
The CBDT said in a statement, “The account holders may be informed that, in case self-certifications are not provided till April 30, 2017, the accounts will be blocked, which will mean that the financial institution will prohibit the account holder from effecting any transaction with respect to such accounts.”
India and the US had signed a deal, for implementation of the FATCA, with effect from August 31, 2015. Under the income tax rules, the FIs, have to obtain self certification from all the account holders, by August 31, 2016, for all individual and entity accounts, opened from July 1, 2014, till August 31, 2015.
The tax department, had on August 31, 2016, indefinitely extended the deadline, for complying with the self-certification norms. The CTBT, said today, the queries were received from the FIs, regarding the revised time lines, for completion of due diligence. The accounts will be blocked, if the norms under the FATCA, are violated, and till the self-certification is received, and due diligence is completed.
Under the FATCA provisions, FIs are required to obtain documentation, else they are required to close the account and report the same, if found to be a reportable account, as per the prescribed due-diligence procedure, for a pre-existing account. The automatic exchange of financial information between India and the US, is allowed by the FATCA.