FATCA / CRS Compliance

FATCA/CRS compliance for Indian financial institutions is governed by Section 508 of the Income-tax Act, 2025, read with Rules 238-240 of the Income-tax Rules, 2026 — the recodified provisions that took effect from 1 April 2026 in place of the erstwhile Rules 114F-114H of the Income-tax Rules, 1962 (which applied under the now-repealed Income-tax Act, 1961). Firms and clients should note this transition: guidance and templates referencing "Rule 114F-114H" or "Form 61B" describe the pre-1 April 2026 position, not the currently applicable one.

Under Rules 238-240, a Reporting Financial Institution (RFI) — broadly, banks, depository and custodial institutions, specified insurance companies, and investment entities — must (i) apply prescribed due diligence procedures (Rule 240) to identify accounts held by residents of the US (under the India-US FATCA intergovernmental agreement) or of other CRS-participating jurisdictions, and (ii) maintain and report the required account and holder information (Rule 239, definitions in Rule 238) annually. The annual statement of reportable accounts, previously furnished in Form 61B, is now furnished in Form 166, due by 31 May following the end of the calendar year to which the reporting relates. A CBDT Guidance Note reissued on 24 July 2026 confirms this framework and extends its scope to specified electronic money products, Central Bank Digital Currencies, and relevant crypto-assets, aligning with the OECD's 2025 CRS amendments.

Non-compliance — inaccurate reporting, failure to complete due diligence, or late/non-filing of Form 166 — attracts monetary penalties under the Act's reporting-obligation penalty provisions. Our FATCA/CRS compliance service scopes due diligence classification, reportable-account identification, and Form 166 preparation and filing against this current Rules 238-240 framework.

We assist with entity classification, reportable account review, documentation, and Indian reporting obligations under FATCA and CRS. This service is relevant for financial institutions, investment vehicles, trusts, and entities with cross-border reporting exposure.