FI a/c holders must self-certify by Apr 30

Government today said Financial Institutions must obtain self-certification of account holders by April 30, 2017 in order to maintain their accounts active.

The financial institutions need to obtain self-certification and carry out due diligence in respect of all individual and entity accounts opened from July 1, 2014 to August 31, 2015, under the Income-tax Rules, 1962 as per the procedure of FATCA.

Such self-certification and documentation were required to be obtained by the financial institutions by August 31, 2016, otherwise they were required to close the accounts and report the same if found to be a “reportable account” as per the prescribed due diligence procedure for pre-existing account.

In view of the difficulties highlighted by stakeholders in following the provision for “closure” of financial accounts, it was communicated last year that the FIs may not close the accounts by August 31st, 2016 in respect of which self-certifications have not been obtained under the alternative procedure, and a revised time line shall be notified in due course. The FIs were also advised to continue to work on completing the required due diligence, including obtaining self-certifications. Queries were being received from the FIs regarding the revised time lines for completion of due diligence.

Today the Ministry of Finance said such account holders would have to produce self-certifications by April 30 otherwise their accounts would be blocked. This would mean that the FIs would prohibit the account holder from effecting any transaction with respect to such accounts. The transactions by the account holder in such blocked accounts may, thereafter, be permitted once the self-certification is obtained and due diligence completed.