SEBI asks market intermediaries to comply with the new income tax rules
MUMBAI: The Securities and Exchange Board of India has asked all market intermediaries to comply with the new income tax rules– Foreign Account Tax Compliance Act(FATCA)–with India becoming a signatory to the multilateral Competent Authority Agreement(MCAA).
The global agreement between countries has put an obligation on them to exchange wide range of financial information after collecting the same from financial institutions in their jurisdiction.
On July 9,2015, India and US signed an agreement to improve international tax compliance and to the implement the FATCA in India.US had enacted FATCA in 2010 to obtain information on accounts held by US taxpayers in other countries.
As per the agreement,foreign financial institutions in India will be required to report tax information about US account holders directly to the Indian government which will in turn relay that information to the US Internal Revenue Service.
The government has made necessary legislative changes to section 285BA of the Income-Tax Act,1961 and ha also notified rules 114F and 114H under the Income Tax Rules,1962.
“All registered intermediaries are advised to take necessary steps to ensure compliance with the requirements specified in the rules after carrying out necessary due diligence,” Sebi said in a circular posted on its website.
