An overview of the FATCA Reporting

 

1. The United States Tax Department came up with FATCA guidelines in 2010 to enforce tax compliance and avoid tax evasion. FATCA stands for Foreign Account Tax Compliance Act.

2. The Indian Government signed the Inter-Governmental Agreement (IGA) with the United States of America in the year 2015 for the implementation of FATCA.

3. Effective January 2016, it is mandatory for all Indian and NRI investors (existing and new) to file a FATCA self-declaration. While the details might be slightly different with each financial institution, the standard information required is as follows:

1. Name
2. Permanent Account Number (PAN)
3. Address
4. Place (city/state) of birth
5. Country of birth
6. Nationality
7. Gross Annual Income
8. Occupation
9. Whether the resident of another country? If yes, then the country of residence, Tax ID number, and type

4. The declaration asks explicitly to include the USA as a country of residence if you are a US citizen or a green cardholder. This holds even if you have moved to India and are now an Indian resident.

5. IRS of USA requires an annual report from Indian and foreign banks located in India against bank accounts as maintained in India by person of USA about maximum outstanding balance in account in calendar year in India.