FATCA facilitates the automatic exchange of financial information between India and the United States. Under this agreement, Indian financial institutions are obligated to furnish relevant information to Indian tax authorities, which is subsequently transmitted to the US. The inter-governmental agreement (IGA) with the US for implementing FATCA became effective on August 31, 2015. Financial institutions were instructed to obtain self-certification and undergo a due diligence procedure to assess the validity of the self-certification. The FATCA declaration is mandated as a compliance requirement and is essential for conducting client due diligence.
Why is FATCA mandatory?
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