NRIs may find it difficult to invest in India despite Fatca
Investors India and the United States recently signed a tax information sharing agreement that will facilitate exchange of information between the two countries, beginning October. Foreign Account Tax Compliance Act (Fatca) was enacted by the US government in 2010, as part of the Hiring Incentives to Restore Employment (HIRE) Act. Fatca requires all foreign financial institutions (FFI) to report information about financial accounts held by the US taxpayers (US citizens and US tax residents) to India's Central Board of Direct Taxes (CBDT), which, in turn, will share the information with the US Internal Revenue Service (IRS). Fatca even makes it mandatory for CBDT to share information about earnings of non-resident Indians (NRIs) located in the US from sources in India to the IRS. Fatca covers the entire banking value chain of the US clients with offshore accounts and requires a new and extended information and reporting system. It is the obligation of the individual to...