Sebi asks market entities to follow I-T Dept norms for FATCA

To ensure compliance with FATCA -- the new US law to check offshore tax evasion -- regulator Sebi today asked all market intermediaries to follow reporting requirements prescribed by Income Tax Department in this regard.
Under Foreign Account Tax Compliance Act (FATCA), foreign financial institutions that fail to give information about their American clients to US authorities would face 30 per cent withholding tax.
A meeting of sub-committee of the Financial Stability and Development Council (FSDC) today also discussed issues regarding inter-regulatory co-ordination for reporting under FATCA, Central KYC Registry and International Financial Services Centre (IFSC).
The meeting was attended by financial sector regulators, including Sebi chairman U K Sinha.

The Inter-Governmental Agreement (IGA) between India and the US, signed as part of FATCA implementation, requires the Indian foreign financial institutions to provide necessary information to Indian tax authorities, which will then be transmitted to the US automatically.
Central Board of Direct Taxes (CBDT) last month issued guidance notes on implementation of reporting requirements for the US law FATCA.

The information related to the calendar year 2015 needs to be reported for only US reportable accounts. The statement was to be furnished by August 31. However, the CBDT extended the date to September 10.
The information (related to calendar year 2015) also needs to be reported for only US reportable accounts and the statement should be furnished by May 31, 2016.

Earlier, the Reserve Bank had also asked all banks and financial institutions to be prepared for the implementation of due diligence and reporting standards under FATCA.