CBDT notifies procedures for financial institutions to file info under FATCA

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The Central Board of Direct Taxes (CBDT) has notified the procedure for financial institutions to register and submit information under the Foreign Account Tax Compliance Act (FATCA), under which the US and India would get automatic exchange of information on tax evaders from September 30.

However, the procedures notified on August 25 came just ahead of the due date of filing information under FATCA by August 31.

The procedure says the reporting financial institutions will have to register with the Income-Tax department by logging in to e-filing site with log-in ID used to file online returns in general. A link to register reporting financial institution has been provided under "My Account".

The financial institution is required to submit details on the screen. A reporting financial institution may register different registration information under different reporting financial institution categories. Once the financial institution gets registered, it is required to submit the form 61 B or Nil Statement under e-file menu.

Sunil Shah, Partner, Deloitte Haskins & Sells, said, "The notification will enable the financial institutions to submit the report for the year 2014 before the due date of 31 August 2015.

"The rules for FATCA reporting under the India-US Inter-Government Agreement had already been notified earlier this month. India had signed FATCA with the United States as part of larger efforts to tackle the menace of tax evasion. Last month, India and the US had inked a tax information sharing agreement under FATCA which will enable automatic exchange of financial information between the two countries on tax evaders from September 30. The US had enacted FATCA in 2010. Under it, foreign financial institutions in India would be required to report information aboutUS account holders, taxpayers directly to the Indian government, which would be then passed on to the US Internal Revenue Service.

In case of non-compliance,the entities will face withholding tax in US. End