1) FATCA allows automatic exchange of financial information between India and the US.
2) India had entered into an agreement with the United States for implementation of the Foreign Accounts Tax Compliance Act (FATCA) with effect from August 31, 2015.
4) If the accounts are blocked due to lack of self-certification, then transactions by the account holder in such blocked accounts will be permitted once the self-certification is obtained and due diligence is completed, the tax department said.
5) Earlier, the financial institutions had to obtain self-certification from account holders by August 31, 2016, in respect of all individual and entity accounts opened from July 1, 2014-August 31, 2015.
6) Mutual funds and other financial institutions had also asked customers to comply with the new norms.
7) In view of the difficulties faced by stakeholders, the tax department had on August 31, 2016, extended the deadline for complying with self-certification norms.
8) The financial institutions were advised to continue to work on completing the required due diligence, including obtaining self-certifications.
9) The purpose of FATCA is aimed at ensuring that individuals pay tax on income generated from their wealth parked overseas.
10) FATCA obliges such banks and financial institutions to report such information about citizens having accounts with them. (With agency inputs)