Bank accounts to be blocked after Apr 30 if not self-certified, says I-T Department
Bank accounts opened between July 1, 2014 and August 31, 2015 need to submit self-certification by April 30
The Income tax department on Tuesday asked the banks to obtain self-certification from customers and carry out due diligence in respect of all individual and entity accounts opened from July 1, 2014 to August 31, 2015 to comply with FATCA( foreign Account Tax Compliance Act) provisions. The I-T department said if the self-certification is not submitted by April 30, 2017 then the accounts would be blocked. This would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts.
“The account holders may be informed that, in case self-certifications are not provided till April 30, 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 Central Board of Direct Taxes or CBDT said in a statement.
“The Inter-Governmental Agreement (IGA) with USA for implementation of FATCA entered into force on 31st August 2015. 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. Such self-certification and documentation was required to be obtained by the financial institutions by 31st August 2016, otherwise they were required to close the accounts and report the same if found to be a “reportable account” as per the prescribed due diligence procedure for preexisting account,” the tax department’s press release said.