Your NPS account won’t get blocked due to FATCA, clarifies PFRDA
NEW DELHI: The Pension Fund Regulatory and Development Authority has clarified that NPS accounts of investors who have not submitted the Foreign Account Tax Compliance Act (FATCA) self certification will not be blocked. The clarification, sent to the registered email addresses of NPS investors on Thursday, comes as a relief to some 40 lakh NPS investors.
These investors had been warned that if they failed to submit a physical signed self-certification of the FATCA by 30 April, their NPS account would be blocked. The PFRDA says it will issue fresh guidelines shortly.
Observers say the FATCA declaration should not be offline because it will unnecessarily add to paperwork. Besides, the insistence on a physical document is an anachronism at a time when the government is pushing everything to the digital format. Mutual funds accept online submission of the FATCA declaration. “It is a self-certification process, and does not require any documents to be submitted,” points out Manoj Nagpal, CEO of Outlook Asia Capital.
The issue brings into focus the centralized KYC which is supposed to apply to all financial dealings of an individual. Ideally, the FATCA self-certification submitted by an individual to banks and mutual funds should be good enough for the NPS as well. “The requirement for another FATCA self certification shows how the systems are still not talking to each other,” says Nagpal.
