The Income Tax Department has said that all account holders under the ambit of the Foreign Tax Compliance Act need to self-certify the accounts by April 30, failing which the accounts will be blocked.
While transactions with respect to such blocked accounts will be prohibited from May, it will be permitted once self-certification is obtained and due diligence is completed.
The measure was announced by the Income Tax department on Tuesday and aims to comply with the Foreign Tax Compliance Act (FACTA), a deal which India signed with the united States. As per the mutual agreement, the two countries can exchange information about tax evaders very easily.
The order also includes the linkage of insurance and stock accounts.
Clarifying on the order, the Income Tax department said in a statement, "The account holders may be informed that, in case self-certifications are not provided till April 30, 2017, the accounts would be blocked, which would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts."
