The Central Board of Direct Taxes (CBDT) has notified Rules 114F to 114H, as part of the Income-Tax Rules, 1962, which require banks, mutual funds and other financial entities to seek additional personal, tax, beneficial owner information, certain certifications and documentation from all account holders associated with concerned Financial Institutions, for the purpose of implementation of FATCA and CRS in India
Hence, FATCA declaration has become mandatory for all investors in India, be it a resident Individual or an NRI. As per IGA signed for FATCA implementation, MFs must obtain a self-certification from customers to determine the account holder’s residence or residences for tax purposes, especially for folios opened on or after 1 July 2014 and have the said process completed by 31st August, 2016.
Failure to comply with the said requirements will be subject to stringent action as specifically indicated in the above rules/guidelines. This carries serious implications as several lakhs of investors in India are yet to file their FATCA declaration.
Though the law says closure of accounts, AMFI’s recommendation to SEBI is to freeze accounts where the investor is not in compliance with FATCA requirements. SEBI is expected to arrive at a final decision on effecting the same, after deliberations with other regulators, to achieve harmonized compliance across the financial services industry.
With the deadline fast approaching, CAMS has been prudently sending communications to all applicable customers and distributors to comply with the said requirements, and also taking every possible effort to facilitate customers in effecting necessary compliance.
Individual investors who had furnished their mobile numbers/email-id at the time of investing, could submit FATCA related information online via www.camsonline.com. The process would be completed on authentication with a One Time Password (OTP) sent to the registered mobile number /email-id of the investor.
For the investors who have not furnished mobile numbers/email-id, a manual declaration form can be downloaded from CAMS Website / AMC website or obtained from their respective distributors. Completed declarations should be submitted to R&T front offices spread across India, before 31 August 2016.
CAMS believes that sensitizing the distributors and investors to the immensity of the situation and by initiating pro-active measures to prompt them to act at the earliest, will help avoid a great deal of anxiety and urgency at the eleventh hour in securing the accounts from closure.
With immense foresight, CAMS has shared some important documents to simplify and aid the process of FATCA declaration. To download the same, please click on the icons as seen below.
