With effect from November 1, mutual fund investors will have to make additional declaration pertaining to foreign account tax compliance act (FATCA) and common reporting standards (CRS) for all new accounts opened, failing which their applications will get rejected.
Under FATCA and CRS, Indian financial institutions will be required to perform enhanced KYC procedures to identify accounts of the US and other foreign taxpayers, as defined, and report on such accounts on an annual basis.
Accordingly, investors are required to provide details such as country of tax residence, tax identification number from such a country, country of birth and country of citizenship.
CRS is a global level common standard for automatic exchange of financial account information. Many fund houses have already started this process while others are expected to implement the same from next week.
MF distributors have already been asking investors to fill in details to comply with the new norms.
“For accounts opened between July 1, 2014, and October 31, 2015, and certain pre-existing accounts opened till June 30, 2014, MF houses are reaching out to the investors to seek the requisite information which has to be submitted by the investors before December 31. If not, the account will be treated as reportable account,” DSP BlackRock Mutual Fund said in a notice.