India: Guidance for FATCA, CRS requirements

India: Guidance for FATCA, CRS requirements

India’s Central Board of Direct Taxes (CBDT) issued guidance concerning FATCA and common reporting standard (CRS) requirements.

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The key points of CBDT notification [PDF 877 KB] (20 June 2016) are summarized as follows:

 

  • The remediation deadline for certain pre-existing accounts has been extended only for CRS reporting. There is no extension for FATCA remediation deadlines. The changes in CRS remediation deadline are highlighted below:
Type of accounts Threshold value Date for reckoning threshold Remediation deadline
Pre-existing accounts (as of 31 December 2015)
"High value" individual Greater than U.S. $1 million 31 December 2015 31 December 2016 (Previously 30 June 2016)
Entity Greater than U.S. $250,000 31 December 2015 31 December 2016 (Previously 30 June 2016)

 

  • Amendments to the definition of the term ‘’passive non-financial entity’’ (passive NFE) include:
Pre-amendment Post-amendment 

“Passive non-financial entity” means:

  • Any non-financial entity that is not an active non-financial entity; or
  • An investment entity described in sub-clause (B) of clause (c) of the Explanation to clause (3); or
  • A withholding foreign partnership or withholding foreign trust;

“Passive non-financial entity” means:

  • Any non-financial entity that is not an active non-financial entity; or
  • An investment entity described in sub-clause (B) of clause (c) of the Explanation to clause (3) that is not located in any of the jurisdictions specified by the Central Board of Direct Taxes; or
  • Not a withholding foreign partnership or withholding foreign trust

 

  • Amendment relating to indicia: In line with the CBDT guidance note (31 December 2015), the amended rules state that “standing instructions to transfer funds to an account maintained outside India” is to be considered as an indicia: (1) in instances of U.S. reportable accounts, for all accounts including depository account; (2) in instances of other (CRS) reportable accounts, for accounts other than depository account
  • Additions in Form 61B  (with effect from 1 January 2017): The below fields have been added to Form 61B in Part B

               - Field B.1.3 - Account Category

                    It states that this will be a two character code. However,                     permissible field values have not been defined as yet.

                - Field B.1.5 -  Currency in which account is maintained 

                    The currency tab is now added to Form 61B – However, it is                     understood this tab was available in the CBDT’s income-tax                     utility for Form 61B.

 

Read a June 2016 report [PDF 57 KB] prepared by the KPMG member firm in India 

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