CBDT Amends FATCA Rules reg. Due Diligence & Statement of Reportable Accounts

CBDT makes Amendments in FATCA Rules reg. Registration of Persons, Due Diligence, Maintenance of Information, Statement of Reportable Accounts, etc.

The CBDT vide Notification No. 48/2016 dt. 20th June, 2016 has notified Income–tax (15th Amendment) Rules, 2016 to make amendments in Rule 114F & 114H (FATCA Rules) reg. Due Diligence & Statement of Reportable Accounts, etc.

Income Tax Rule 114H has been amended in order to provide sufficient time to the reporting financial institutions for completing the due diligence procedure in respect of other reportable account referred to in Rule 114H (3)(d)(ii), which is high value account as on 31st December, 2015, the timeline specified for review of pre-existing individual account has been extended from 30th June, 2016 to 31st December, 2016.

The timeline in case of U.S. reportable account which is low value account as on the 30th June, 2014, shall continue to be 30th June, 2016. Similarly, in respect of other reportable account referred to in Rule 114H(5)(e)(i), timeline specified for review of pre-existing entity account has been extended from 30th June, 2016 to 31st December, 2016. The timeline in case of a U.S. reportable account shall continue to be 30th June, 2016.

CBDT Notification 48/2016 dt. 20th June, 2016

In exercise of the powers conferred by section 285BA read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Government with respect to registration of persons, due diligence and maintenance of information, and the Central Board of Direct Taxes for matters relating to statement of reportable accounts, hereby make the following rules further to amend the Income-tax Rules, 1962, namely:-

1.(1) These rules may be called the Income–tax (15th Amendment) Rules, 2016.

(2) Save as otherwise provided in these rules, they shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules 1962 (hereafter referred to as the said rules) in rule 114F, in clause (6), in the Explanation, in clause (D),-

(a) in sub-clause (ii), for the word, brackets and figure “clause (3)”, the words, brackets and figure “clause (3), which is not located in any of the jurisdictions specified by the Central Board of Direct Taxes in this behalf” shall be substituted;

(b) for sub-clause (iii), the following sub-clause shall be substituted, namely:-

“(iii) not a withholding foreign partnership or a withholding foreign trust;”,

3. In the said rules, in rule 114H,-

(a) in sub-rule (3),-

(I) in clause (b), in sub-clause (i), for item (D), the following item shall be substituted, namely:-

“(D) in case of U.S. reportable account, any standing instructions to transfer funds to an account maintained in a country or territory outside India and in case of other reportable account, any standing instructions (other than with respect to a depository account) to transfer funds to an account maintained in a country or territory outside India; or”;

(II) in clause (c), in sub-clause (ii), for item (E), the following item shall be substituted, namely:-

“(E) in case of U.S. reportable account, any standing instructions to transfer funds currently in effect and in case of other reportable account any standing instructions (other than with respect to a depository account) to transfer funds currently in effect:”;

(III) in clause (d), for sub-clause (ii), the following sub-clause shall be substituted, namely:-

“(ii) in case of a U.S. reportable account which is low value account as on the 30th June, 2014, shall be completed by the 30th June, 2016 and in case of other reportable account which is high value account as on the 31st December, 2015, shall be completed by the 31st December, 2016;”;

(b) in sub-rule (5), in clause (e), for sub-clause (i), the following sub-clause shall be substituted, namely:-

“(i) review of pre-existing entity accounts with an aggregate account balance or value that exceeds an amount equivalent to two hundred and fifty thousand U.S. dollars as on the 30th June, 2014 (in case of a U.S. reportable account) shall be completed by the 30th June, 2016 and review of pre-existing entity accounts with an aggregate account balance or value that exceeds an amount equivalent to two hundred and fifty thousand U.S. dollars as on the, 31st December, 2015 (in case of other reportable account) shall be completed by the 31st December, 2016;”.

4. In the said rules, in Appendix-II, with effect from 1st January, 2017, for Form 61B, the following form shall be substituted, namely:-

FORM NO. 61B

[See sub-rule (8) of rule 114G]

Statement of Reportable Account under sub-section (1) section 285BA of the Income-tax Act, 1961

….Contd…..

CBDT Notification 48/2016 dt. 20th June, 2016 along with Income Tax Form 61B

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