India to share NRI bank account information with other countries
Have a NRI Bank Account? India to share NRI bank account info under CRS agreement
NRI bank account information may soon be available to your home country tax authorities
NRIs, PIOs & OCI holders who hold passports of Australia, Canada, Germany, UK and many more countries will soon have their Indian NRI bank account information made available to the tax authorities of their home countries. A step by many countries to stop people from evading taxes by hiding their money in foreign bank accounts.
First FATCA for USA - Now CRS for over 80 Countries - Sharing Account holders information
NRIs, PIOs, OCI holders in the United States have probably all heard about the tax information sharing of account holders under the FATCA agreement between India and the United States of America. Now tax sharing of the Indian government is moving on to another stage and many more countries whose citizens have bank accounts in India may soon be effected.
The Government of India has signed the Common Reporting Standard (CRS) agreement which is a global standard for the automatic exchange of information between various countries. FATCA effects only USA citizens and residents such as green card holders, however CRS effects citizens of a large number of countries. As of November 02, 2016 there were 87 countries that had already signed the CRS agreement and more are expected to sign on. India happens to be one the signatory countries and their intended first information exchange is supposed to be September 2017.
NRI Bank Accounts Reporting under CRS
Just about every account held by NRIs, PIO, OCI in India will become reportable under CRS agreement. Banks in India have already started sending out letters to their NRI account holders to ascertain their tax identification numbers for their countries of residence.
NRIs who have any type of bank account in India may have already heard from their bank. Those NRIs, OCI or PIOs who have bank accounts in India and have not yet received a request to provide their tax identity numbers, residency status & citizenship etc. can expect to hear soon from their banks, mutual funds, demat participants, brokers, insurance companies or other financial Institutions they deal with to provide the FATCA/CRS declaration so that they can update their records and get ready for the required reporting under the tax agreements to share information. In some case where an NRI deals with more than one institution, they may receive more than one request for such information.
The FATCA-CRS Form’s that are sent to NRI bank account holders may vary from bank to bank, however the information required will probably be the same for most banks. Here are two sample forms to give you an idea of what to expect. ICICI Bank FATCA-CRS Form - AXIS Bank FATCA-CRS Form. These forms are applicable to individuals. Contact your bank where your NRI accounts are held for more information.
What account information is required to be reported under CRS
Some of the information that will be reported about your NRI account to your countries tax authorities:
Date of birth (for individuals)
Tax identification number (TIN) (if country issues TINs)
Country (countries) of tax residence
Account balance or value (or the closure of the account)
Amount of interest, dividends, gross proceeds and other payments made or credited to the account (if applicable).
Some countries may require additional information to be reported as per their agreements. For instance Canada does not require the account holder’s place of birth but other countries may want this information also to be included.
Will OCI holders living in India be effected?
Everyone holding NRI bank accounts will be effected. OCI holders who live in India will also be included in CRS or FATCA reporting. Expect to receive a request soon from the bank where your NRI bank accounts are held asking you to submit your residency details, tax identification numbers etc. Here is a quote from one of the banks asking its NRI account holders to submit their information: “within 15 days failing which your account shall be frozen and subsequently taken up for closure”
Type of NRI bank accounts are reportable
CRS requires financial institutions to identify and report account information of all those who are residents of other countries and have bank accounts in India. All financial accounts held by individuals and entities, including bank accounts, mutual funds, brokerage accounts, custodial accounts, annuity contracts (including segregated fund contracts), as well as life insurance policies with cash value are reportable.
Generally speaking if you have foreign citizenship or are resident of another country, your account information will be reported to your home country.
When will bank account information exchange start?
Dates may vary depending on the country of whose citizenship you hold. Many countries are scheduled to start exchange of information by September 2017 and some will start by September 2018. Click Here for infoDetailed information on this topic can be found in the CRS Guidance on FATCA & CRS issued by the Government of India
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