On 9 July 2015, India signed the Inter-Governmental Agreement with U.S. on the Foreign Account Tax Compliance Act (FATCA). Prior to that, on 3 June 2015, India signed the OECD’s multilateral tax treaty - Model Competent Authority Agreement (MCAA), commonly known as Common Reporting Standard (CRS), for tax information sharing with the signatory countries.
FATCA and CRS read with section 285BA of the Income-tax Act, 1961 form part of India’s local tax regime that provides for automatic exchange of financial account information. This regime obliges financial institutions (FIs) such as HDFC Bank to perform due diligence procedures and identify individuals that are reportable persons and certain entities in which any individual(s) that is/ are reportable person(s) hold controlling interest. Further there is an obligation to identify non-participating FIs. The relevant information would be reported the local tax authorities that, in turn, are required to share such information with appropriate foreign authorities. Towards compliance with FATCA and CRS, we would be required to seek additional personal, tax and beneficial owner information and certain certifications and documentation from our account holders and counterparties. Such information may be sought either at the time of account opening or any time subsequently.
The onus to provide accurate, adequate and timely inputs in this regard would be that of the accountholder or counterparty. In this regard, any change in the status or information or certification previously provided should also be intimated to HDFC Bank within 30 days. In the appropriate cases and also especially in case of any omission, delay or failure in providing such information, we would/ may be constrained to report relevant information pertaining to the account to the Indian tax authorities. Further, in certain cases where the customer fails to provide the required information or certification within specified timelines, we may be constrained to freeze or close accounts eventually.
For the purposes of such regulations, we may also be required to provide information to any institutions such as withholding agents for the purpose of ensuring appropriate withholding from the account or any proceeds in relation thereto. As may be required by domestic or overseas regulators/ tax authorities, we may also be constrained to withhold and pay out any sums from your account or close or suspend your account(s).
We will be unable to provide advice you about any tax status or FATCA classification relevant to your account. It is your responsibility to ensure that you record your correct tax status/ FATCA classification. You may seek advice from your tax advisor in this regard.
Please note that you may receive more than one request for information if you have multiple relationships with different members of the HDFC Group. Therefore, it is important that you respond to our request, even if you believe you have already supplied any previously requested information.