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Submit self-certification of accounts to bank by April 30 or risk closure of account: CBDT
By: Express Web Desk | New Delhi | Published on: April 12, 2017 12:47 pm
Photo for representation. (Express Archive)
All bank accounts that were opened between July 1, 2014 and August 31, 2015 will require submission of self certification forms by April 30 this year, failing which the accounts will be blocked, according to a statement issued by the Central Board of Direct Taxes.
“The financial institutions are advised that all efforts should be made by the financial institutions to obtain the self-certification. The account holders may be informed that, in case self-certifications are not provided till 30 April 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 transactions by the account holder in such blocked accounts may, thereafter, be permitted once the self-certification is obtained and due diligence completed,” said Income Tax Commissioner Meenakshi Goswami, Central Board of Direct Taxes in a departmental statement issued on April 11, 2017.
The owners/operators of the accounts in question will have to submit the self-certification certificates by April 30 in compliance to Foreign Account Tax Compliance Act (FATCA) provisions.
Indian government entered an Inter-Governmental Agreement (IGA) with USA for implementation of FATCA coming into force on 31st August 2015. The statement read: “Under the alternative procedure provided in Rule 114H(8) of the Income-tax Rules, 1962, the financial institutions need to obtain self-certification and carry out due diligence in respect of all individual and entity accounts opened from 1st July 2014 to 31st August 2015.”
“In view of the difficulties highlighted by stakeholders in following the provision for closure of financial accounts, it was informed vide Press Release dated 31st August 2016 that the financial institutions may not close the accounts by 31st August 2016 in respect of which self-certifications have not been obtained under the alternative procedure and a revised time line shall be notified in due course. The financial institutions were also advised to continue to work on completing the required due diligence, including obtaining self-certifications,” the statement added.
In the past, financial institutions had to obtain self certification documents from bank account holders by August 31, 2016 deadline for the accounts of opened in the said duration. However, due to difficulties in obtaining the submissions, the tax department gave some relief and extended the deadline for submission and compliance with the self certification norms to the April 30 date.
Customers of mutual funds and other financial institutions were also asked to submit the compliance documents. FATCA’s main purpose is to ensure account holders do not evade tax on income generated on wealth lying abroad.
According to FATCA norms, banks and financial institutions have to report such information about individuals or entities holding or operating such accounts with them.
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