India: FATCA Reporting Deadline Extended
On 25 August 2015, the Indian Ministry of Finance released an order extending the Foreign Account Tax Compliance Act (FATCA) reporting filing deadline for Indian Financial Institutions to 10 September 2015 (from 31 August 2015).
The FATCA Agreement between India and the United States was signed on 9 July 2015.
FATCA seeks to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of certain payments made to Foreign Financial Institutions (FFIs) who do not agree to identify and report information on U.S. account holders. Governments have the option of permitting their FFIs to enter into agreements directly with the IRS to comply with FATCA under U.S. Treasury Regulations or to implement FATCA by entering into one of two alternative Model IGAs with the United States.
More specifically, India and the United States signed a Model 1 Agreement. Under this agreement, FFIs in India will report the information required under FATCA about U.S. accounts to the Indian Government, which in turn will report the information to the IRS. This agreement is reciprocal, meaning that the United States will also provide similar tax information to the Indian Government regarding individuals and entities from India with accounts in the United States.
