Fatca Filing

The Foreign Account Tax Compliance Act (FATCA) is legislation put in place by the United States Government. The purpose of the legislation is to ensure that foreign financial institutions provide the US government with information about clients who could be subject to American Tax laws. FATCA helps the US Government track the details of transactions and investments of US citizens residing in a foreign country. The primary intention of this legislature is to facilitate the exchange of information between two countries, which means that if a U.S. citizen holds an account in a foreign country, the details of his/her income or bank account will automatically become declared information through this Act. Thus, all the Foreign Financial Institutions (FFIs) located abroad will pass the particular declared information of every US citizen's account details to the Internal Revenue Service(IRS) of the US under FATCA regulation.

Impact of FATCA

The FATCA is an agreement which is signed between the US Government and the Indian Government to report assets and income held by citizens of the US in offshore accounts. FATCA was signed between India and the US works to find the deliberate income tax evasions carried out by US citizens or residents in offshore accounts which is illegal, as against tax avoidance which is legal in the US.
The agreement between India and USA was signed between the two countries on July 9, 2015, and the initial deadline for all the aforementioned account holders to get the compliance done was August 2016, which was later extended to April 30, 2017, to give people more time to adapt.
Indian institutions geared up and started working on different methods to ensure compliance with FATCA. Finally, the Indian Government may have to sign up with the Internal Revenue Service (IRS) for this purpose. The Government of India obtained a Global Intermediary Identification Number (GIIN), according to a regulatory circular. Therefore, the Government shall report the assets of such clients to the IRS.
According to the new norm being imposed by the Indian banking system from May 1, 2017, all bank account holders, mutual funds, and insurance scheme investors are expected to compulsorily get their Foreign Account Tax Compliance Act (FATCA) compliance done or else their accounts would be frozen.

What happens if a person does not comply with FATCA?

If one fails to get FATCA compliance done by April 30, 2017 (Sunday), any of the bank, mutual funds, or insurance investment accounts opened between the aforementioned dates will be frozen, which means the taxpayer will not be allowed to carry out any transactions from those accounts even if there is money in it. As for mutual fund account holders, the investors will not be able to access the amount already invested in funds or carry out any new investments.

How to file FATCA details?

FATCA details can be filed using a self-certification form that is available with the mutual fund company’s website, can also be done at all service centres / Asset Management Companies (AMCs).
One can use either offline or online mode to submit their FATCA form details.
For physical submission, one needs to duly sign the FATCA form along with copies of necessary and relevant documents and submit the same at the nearest AMC branch.
Alternatively, one can approach their Registrar and Transfer Agent (R&T) for online submission, where PAN card is used to generate a one-time password sent on to a person’s registered mobile or email.

What information is required for Fatca Filing?

To file a FATCA form, the following information and documents would be required:

Name & Demographic Information
Place of Birth
Income Details
Net worth Details
Tax Identification Number(s)
PAN
Passport Details
Elections / Voters ID
Aadhaar Card
Any other government-issued ID card.
If taxpayer-identification document is not available, an explanation for the default needs to be enclosed.

To know about the procedure for reviving a dormant account, click

here.

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Frequently Asked Questions

Common questions about FATCA Filing Compliance for US Citizens in India.

FATCA stands for the Foreign Account Tax Compliance Act, a legislation enacted by the United States government to facilitate the exchange of information between countries regarding financial accounts held by U.S. citizens abroad. Its primary purpose is to combat tax evasion by ensuring that foreign financial institutions report details of accounts held by U.S. taxpayers to the Internal Revenue Service (IRS).

All Foreign Financial Institutions (FFIs) located outside the U.S. must comply with FATCA regulations by providing information about their U.S. account holders to the IRS. Additionally, U.S. citizens or residents holding offshore accounts need to ensure their compliance with FATCA requirements.

If you fail to comply with FATCA requirements by the deadline (which was April 30, 2017, for Indian account holders), any bank, mutual fund, or insurance investment accounts you hold may be frozen, meaning you won't be able to conduct transactions or access your investments until you complete the compliance process.

You can file FATCA details by completing a self-certification form available on mutual fund company websites or at their service centers/Asset Management Companies (AMCs). You can submit the form and required documents either offline at the nearest AMC branch or online through the Registrar and Transfer Agent (R&T) using your PAN card.

To file a FATCA form, you'll need to provide personal details like your name, date of birth, income and net worth information, tax identification numbers (TIN), PAN, passport details, Aadhaar card or other government-issued ID cards, and an explanation if you don't have a TIN.

Yes, FATCA compliance is mandatory for all account holders, including those with bank accounts, mutual funds, and insurance investment schemes. Indian financial institutions are required to report details of U.S. account holders to the IRS under the FATCA agreement signed between India and the United States.

Yes, you can revive a dormant account that was frozen due to non-compliance with FATCA by completing the compliance process and submitting the required FATCA details and documents to the respective financial institution.

No, FATCA is applicable to all U.S. citizens and residents, regardless of whether they live in the U.S. or abroad. It is designed to ensure that the IRS receives information about financial accounts held by U.S. taxpayers outside the country.

FATCA helps the U.S. government track the financial transactions and investments of U.S. citizens residing abroad. It aims to combat tax evasion by ensuring that information about offshore accounts held by U.S. taxpayers is reported to the IRS, enabling the government to identify and address cases of deliberate income tax evasion.

Yes, FATCA compliance can be completed online by submitting the self-certification form and required documents through the Registrar and Transfer Agent (R&T) using your PAN card to generate a one-time password sent to your registered mobile or email.