Youth Incorporated Magazine

To avoid a blockage in any of your transactions it is necessary for you to cope up with the new resolution of the Central Board of Direct Tax (CBDT). As per the series of tweets, through which the tax collecting authority of India clarifies that those account holders who fail to self-certify their account for Foreign Account Tax Compliance Act will certainly be blocked by 2017, April 30. To resist closure, it becomes mandatory for all the account holders who have opened their accounts between 2014, July 1 and 2015, August 31. Blockage of the account prevents even the owner of the account from access and transacting through the account.

“The account holders may be informed that, in case self-certifications are not provided till April 30, 2017, the accounts would be blocked, which would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts”, the Central Board of Direct Taxes was quoted as.

Brush your facts about FATCA:

FATCA would allow a free flowing exchange of financial information between India and the states, which will get both the countries together fighting against tax evaders.

India entered into an agreement with the United States for implementation of the Foreign Accounts Tax Compliance Act (FATCA) w. e. f. 2015, August 31. By agreeing to this the countries have tried leaving no unturned stone to expose the offenders.

In every single case are the Investors, required to provide details such as country of tax residence, tax identification number of the same resident country, country of birth, country of citizenship etc.

If the accounts are blocked due to lack of self-certification, then transactions by the account holder in such blocked accounts will be permitted once the self-certification is obtained and due diligence is completed, the tax department said.

Earlier, the financial institutions had to obtain self-certification from account holders by August 31, 2016, in respect of all individual and entity accounts opened from July 1, 2014-August 31, 2015. In view of the difficulties faced by stakeholders, the tax department had on August 31, 2016, extended the deadline for complying with self-certification norms. But ahead look no clear chances of another extension.

Mutual funds and other financial institutions are also in a bid to ask all their customers to comply with the new norms to avoid any consequences later.The financial institutions were said to carry on their work on completing the required due diligence, including obtaining self-certifications.

The purpose of FATCA is aimed at ensuring that citizens pay tax, irrespective of their current residence, on the income generated from their wealth parked overseas and investment that reaps profitable returns every year.

FATCA obliges such banks and financial institutions to report such information about citizens having accounts with them, to ensure maximum success in the cooperation between the countries.