India turns to IRIS for FATCA reporting
After two months of signing the inter-governmental agreement (IGA) with US to implement the Foreign Account Tax Compliance Act (FATCA), on 31 Aug 2015, CBDT issued guidance notes on 114F to 114H of the Income-Tax Rules.
The IGA aims towards greater transparency between the two countries on tax matters.
FATCA requires all financial institutions outside of the US to periodically transmit information on financial accounts held by Americans to the US Internal Revenue Service, or face a 30 percent withholding tax on payments made from the US. The IGA requires the Indian FIs to provide necessary information to Indian tax authorities, which will then be transmitted to the US automatically.
India today started complying with the provisions of FATCA where more than a dozen Indian entities including banks, insurance companies and mutual funds filed their returns with the Income Tax department using IRIS’s software.