236 Responses to FATCA/CRS: Understand How and what Information is gathered and shared with USA and other countries

  1. SA says:

    Dear Jigar,
    I have one more question:
    If money earned in UK is deposited as NRE in India, is there any of it taxable in UK for an Indian, who is on work visa (and therefore tax resident in UK?) as long as one remains Indian national?
    thank you!

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I think UK taxes global income so you would need to include your NRE interest in your UK tax return. However, you would need to check with UK CA. Thanks.

  2. Sameer Patel says:

    Hello Jigar,

    What a great Post! thank you for sharing your wisdom!
    I am in USA on H1-B since 2011 and I did not know I had to file FBAR and 8938. I have NRE/NRO accounts in INDIA. I primarily used these for expenses when I was visiting India. Note we provided the SSN for all accounts Last year under fatca.

    I am also a joint holder with my grandfather on some mutual funds where value is 60k USD. These mutual funds were purchased long time ago and I am a secondary on all the funds . I did not know I had to declare the funds since I assumed they were my grandfathers responsibility.

    To make things worse I filed an FBAR last year but only included 1 account which has the highest value about 15K usd. I was unaware “I had to declare all accounts” when “Aggregate” value is greater than 10k. Again all of them are joint accounts. only 1 has a value of 15K all the others are small amounts about 600$ ~ 800$. should I amend the Prior FBAR considering the amounts are very small or would that trigger an audit?

    Further more, my grandfather moved to US recently so we provided “his SSN Only” to India Mutual funds to be Fatca compliant. we plan on reporting the Mutual Funds this year. What is the best course of action for me to A. correct FBAR filling and B. should I declare Mutual Funds now?

    Thanks,

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would recommend removing your name from joint holder. This will simplify your life. You may also want to amend FBARs and FATCA but please consult your CPA. Thanks.

  3. Abin Abraham says:

    Dear Sir,

    My company has a Provident Fund trust and we have already given FATCA/ CRS declaration to the banks. In this regard can you clarify
    1. In future whether the trustees will have any other additional compliance requirement as they are the beneficial owners as defined under PMLA?
    2.As the PF trust is a non-reporting financial institution will there be any due diligence required under rule 114H? (please note that the members of the PF trust include some expat employees from other countries including the US.)

    Thanks and Regards
    Abin

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. They may as per regulation. There is no guarantee.
      2. I think 114H applies to all institution and would apply to you too. However, I would recommend consulting your CA. Thanks.

  4. Nilesh says:

    Hello,

    I am a US based NRI. I would like to declare my India income in US and also file FATCA form for 2017. I was told that during my US tax filing for 2017, I have to declare India income from Apr 2016 to Mar 2017 (as in India the financial year is April to March). But when I file FATCA form (8938), should it be for Apr 2016 to Mar 2017 or from Jan 2017 to Dec 2017. If it’s the later one, then we don’t know the tax that was paid in India. Also, how do we show India income for period that’s not a financial year period.

    Please advise how it should be handled.

    Thanks in advance.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would recommend preparing a worksheet with Indian income by calendar years and include the same for filing your US income tax return and FBAR/FATCA. You would need to calculate the tax for the calendar year period for claiming foreign tax credit. Thanks.

  5. B says:

    I am a US citizen living in India from 2010. I have relocated to india after trasferring all assets to india in 2010. I opened a local bank account and invested all cash into FDs. Total Almost 1crore Now It’s 2018 And i m paying regular taxes to indian govt. However Local Banks Doesn’t Know I m a US citizen. They Never Asked Fatka As All These Are Opened In 2010. I have SSN and PAN.

    I have no US income and i have not filled US taxes since 2010. What Should I do to be on track if I have to file US taxes ?
    Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. As you are a US citizen, you are considered a US resident for income tax purpose even if you do not live in USA.
      2. I would recommend that you contact your CPA in USA and file your previous tax return as well as delinquent FBAR and FATCA forms. You may be eligible for 0% penalty under streamlined compliance as you have been living in India. However, it is better to clear all prior non-compliance. Thanks.

  6. Concerned NRI says:

    Hi,
    I have been NRI in US since 2011 (and never been back to India) and have had balances in India around 2-3 K $ but never seems to be exceeding 10K limit. in 2016 I linked my US number to one of the Resident savings account (which i seems to be unable to convert to NRE/NRO due to a old dormant account on the same bank that can be closed only in person) so that i can get OTPs in case of emergencies but i havent received any request for FATCA/CRS updation from the bank. I have lent some money friends who transferred to resident savings instead of sending to US so the balance in the bank exceeded just over 7.5 lac (around 12k $). I had sent those money to my parents just before end of the year. I was thinking of FBAR but was little bit concerned about what is the right approach.

    1. should i sum the amount in savings and FD account for each bank under 1 customer ID or have to report separately. If i report separate would it be calculated as a total sum which could be more (like if I had 10500 $ in savings at one point and converted them to 2 FD on the same bank consists of 5k each and declare them separate means it could end as a max value combined of 20k$).

    2. Also should we need to worry about dormant/frozen accounts?

    3. Since previous years i never had over 10k $ should i file FinCen(FBAR) for only 2017 or for last 3-4 years. would there be a possibility of audit in either case?

    4. my father might have applied for insurances on my name 15-20 years back and i don’t have any details on them and also i think i have PF account some money (might not be big amount) when I was India but it might have frozen as well. is it good idea to file FBAR without knowing all the accounts

    Thanks in Advance

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. While account can be closed physically only. If you give your KYC details, it can be converted to NRO account.
      2. The reporting is by unique ID. If you report by customer ID, you would combine the accounts. If you report by account number, you would report individually.
      3. Yes, as you are the owner of the accounts.
      4. Only for the years when your accounts exceeds threshold limit.
      5 Yes, you would need to include all the accounts. Thanks.

  7. shailee says:

    dear sir,

    kindly help me on how to file the return for fatca and on which portal it is to be filed and which form is to be filled ?
    my client is an NRI based in USA holding a demat with us and we are a share broking firm in Mumbai . So being a broker please guide me on how to disclose and declare the information of my client for the income earned by him during the year in the fatca return.
    thank you.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      You don’t have to file the FATCA return. You would only report to the depository / IT department as per the requirement (FATCA/CRS) for all NRI clients. The IT department will report the US based clients to IRS (FATCA) and other countries (CRS) to OECD countries. The US Client would also file FATCA (Form 8938) while file his income tax return to IRS. Thanks.

      • SHAILEE says:

        how to report to the depository or IT department. i dont know the procedure . will be very thankful if you help

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          I would recommend you contact your company whose DP you have e.g. NSDL or CDSL. They will guide you. Thanks.

  8. Ashok says:

    I would like to know about exchange of account information between India and United Kingdom under FATCA. In particular, I would greatly appreciate responses to the following questions.

    1. When does or did the exchange of information between United Kingdom and India start to take place?
    2. What is the amount of account balance below which the information exchange does not take place?
    3. What is the year of account opening, before which, information exchange does not or will not take place?

    I look forward to hearing from you.

    Ashok

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      For UK and India, the exchange of information would be under CRS. FATCA is for USA only.
      1. It has already started and will continue in piecemeal. No one knows whose or how much information is shared till date.
      2. There is no minimum threshold so even Rs. 100 will be shared.
      3. The effective date of CRS is January 1, 2016. Thanks.

  9. Shankar says:

    1) Can we transfer money from NRI account to father/brother/relatives saving account to gift them money ? They can use this money for buying property or business ? is it legal in india ?
    2) Does NRI account transfers applicable for U.S gift tax ?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes, you can gift money to your close relatives in India. However, you would not have any say on where to invest after you gift. If you keep the beneficial interest in where the money is invested, it is not a gift and may be considered as a “benami transaction”.
      2. Yes, NRE/NRO accounts are owned by the US resident. Only thing is that the account is located in India and in INR. As the accounts are owned by a US resident, all laws related to income, gift, etc. will apply. You would also need to consider the gift tax laws of India as well. Thanks.

  10. Ravi Teja says:

    Hi Sir, Very good article. I have few doubts. Could you please clarify ?
    1. Reg. Form 8938, if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.
    Question: More than $75,000 at any time during the tax year means a) is it total aggregate amount transferred to that account ? (or) b) is it Max. amount reached in any day for that tax year ( i.e., example: transfer 50K, withdraw 20k and again transfer 28k. Total transferred in the year: 78k but, Max. amount in account is 58k at any time during the tax year). So, is it a or b ?

    2. If i transfer money from my NRI account to my uncle (i.e., ex: some 25K) as i borrowed money for my uncle for my living expenses and education. After 3 years, if i pay back that money to my uncle account from my NRI account. is it still considered as U.S gift tax ? any ways to avoid it ? Will nri account transactions considered for gift tax ?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. If transfer 50K, withdraw 20k and again transfer 28k, your closing balance would be 58k, and need to include. However, if transfer 50k, withdraw 35k and again transfer 20k, you may not include. However, you would need to consider all accounts and all financial investments – share, mutual fund etc. for the threshold amount.
      2. If you have shown money received from your uncle as loan, it would be a loan return and not a gift. Thanks.

  11. Mayank says:

    Hello Sir,

    We moved to USA in August 2016. That time we didn’t have $10k in INDIA. Now in 2017 We have transferred about $50k to our bank in INDIA from salary earned in USA. Do we need to declare this to IRS while filing IT RETURNS in USA?. Technically this is income earned in USA but transferred to INDIA. IRS ask to declare FATCA if we have more than $50k financial assets in INDIA in financial year 2017. I am bit confused. We are filing joint tax returns. Please suggest. Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Yes, if you have financial accounts/ assets above threshold, you would need to disclose the same in FBAR and FATCA form 8938 respectively. The FATCA limit for joint return is $100k. So while you may not have to file FATCA, you would need to file FBAR (Fincen 114). Also, you would need to include any income in India in your US tax return. It is important to invest in India considering both India and US taxation and compliance requirements. Thanks.

  12. Jogender says:

    Hello Sir
    Do you know if India govt already done reporting to US in 2017 for year ending 2016?
    Have you heard any cases who got notices from IRS based on this reporting
    Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      The Indian government has already started sharing data as for US residents, data from June 30, 2014 needs to be reported. I think it will take 1 more year for notices from IRS as IRS compile all data and do some analysis. The notices may be issued in 2018 or latest 2019. Thanks.

  13. Aakash says:

    Jiger, Thanks for this valuable information and taking time to reply to queries.

    I am NRI for tax purposes since Jan 2008. Currently, on US work visa.
    I have NRE and NRO account(opened around 2010), never used both of them after opening them. Have been maintaining around Rs. 7,000 in each.
    I had few savings account and an education loan account since 2007. All these account also never had more than 1Lakhs combined since 2007.
    Have a PPF account which parents opened for me. In 2017 PPF account balance is 650000.
    LIC policies with an approximate surrender value of 1.5Lakhs in 2017.
    Demat account with the current value of 4Lakh.

    In 2017 I closed all personal Indian accounts other than NRE/NRO account. Transferred stocks to parents and closed demat account(Stocks were anyhow gifts from parents)

    All these years, while filing taxes in USA, I didn’t file FBAR as by rough calculations assets were not more than $10k per year. Never filed a form 8938 as assets were less than $50k.
    I included Interest earned in India as a lump sum amount to interest and dividend income in IRS forms.
    Also, I am not filing Indian tax return as income(interest, dividends) is barely few thousand rupees. No MF investments, no rental income.

    1. Now as I understand from this article, RBI may have aggregated assets and earnings by unique identification, either SSN or PAN. I never gave US SSN to any financial institution in India. Even if RBI had aggregated all my income by PAN it will not go above $50k and thus RBI would not have reported it to IRS. Is this correct understanding.
    – I have not received any Fatca letter or inquiry from IRS in the USA

    2. As I am not using NRE and NRO accounts and do not see using it in near future. Is it wise to close the NRE-NRO accounts with the existing bank and open it with another bank if there is a need in future? NRE account is already inoperable online.

    3. I am considering closing an account with the existing bank and opening with the new one(in the future only if there is a need for it) as I was not aware of these reporting rules and didn’t keep proper yearly records. During one odd year from 2014 to 2017 total assets in all the accounts(PPF+savings+current+demat+LIC surrender ) might have been little over $10k. Is this a good idea?

    4. Is there a harm if I continue to keep NRE and NRO account in the current state. NRE account is already inoperable and I do not foresee its use in near future.

    Thanks in advance.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes, I would think so.
      2.4. You may continue as the balance in the NRO/NRE is very less. However, I would suggest to report the interest income, however small, in your US tax return.
      3. As an NRI, you can only open NR/NRE account.
      5. As per new notification, PPF account needs to be closed for NRIs so suggest to close the account soon. Else, it will give return of savings account only i.e. 4%. Also, if you can gift your shares to your parents (transfer from your demat to theirs) and close your demat, your financial assets in India would be less than the threshold. However, if you want to regularize your accounts, you may report the account under Streamlined Disclosure and don’t have to worry about anything. Thanks.

  14. Shashi Ranjan says:

    Mr Patel,

    I sold a house in India in 2017 for 1.5 cr which was bought in 2005 for .44 Cr. I invested in the Capital Bonds under Sec 54 exemption to minimize my LTCG tax exposure in India. I am a Permanent Resident in US and my question are :
    1) Will the IRS consider the exemption on Tax which I got under Indian Tax Laws
    2) for computation of LTCG in US what Foreign Exchange Rates are considered
    3) Indian Bank (ICICI) report calendar year Balance or Highest Balance in the Calendar Year Under FATCA
    Great Appreciate your help and view

    Regards
    Shashi

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. No. The exemption is only as per IT act of India and has nothing to do with IRS.
      2. Forex rate on the date of purchase and on date of sale.
      3. Both. Thanks.

      • Shashi Ranjan says:

        Mr Patel Thanks for your reply.
        Few More queries please

        1) Does IRS allow indexing for the purposes of LTCG calculation for House Property/Assets in India?

        2) If the bank balance during the year is higher 150k USD but the year end balance is less than 10k USD, will the Indian Bank send the information to US Government under FACTA

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          1. No indexation in USA. However, as your capital gain is calculated in USD, you would get benefit of Rupee depreciation.
          2. Yes, I would think so. Thanks.

  15. Jogender says:

    Hi Jigar

    I have 2 questions.
    1. If there are 2 NRO accounts with different banks, and both below 50K, how are they aggregated. Or will both skip reporting.
    2. Do bank share information about accounts?

    Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. It may be aggregated by RBI based on PAN or based on your SSN. Not sure.
      2. Yes, it is mandatory. Thanks.

  16. Shyam S. says:

    Dear Sir

    If there is a resident account which was closed in 2017. But bank never asked for any fatca specific information. Will this bank still perform diligence on closed accounts?

    Now if I open an NRO account with different bank in 2018. Will fatca reporting include past reporting since June 2014 for residence accounts closed in 2017. Or the second bank will report only from 2018.

    Please advise.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. The bank may ask.
      2. The new bank would only report form 2018 as it will not have any information of 2017. However, you may have to prove the source of funds in your account in 2018, from where it is created. It can not magically appear. Thanks.

  17. Prakash Parekh says:

    Hi Jigar,

    This is a wonderful article. I want to know that does US report information of Indians residing in US to Indian Government? If it does then what information and how much does it report. Is there any blog/article regarding that. I am currently in US and am planning on moving back to India for good in a year. So I want to make sure that I am compliant with the Indian IT norms so that I dont fall into any issue after moving back.

    Thanks
    Prakash

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      The US will report the same information – account details, balances, income, etc. Please check recent article on the subject in economic times at https://economictimes.indiatimes.com/news/economy/policy/income-tax-department-to-target-senior-executives-who-have-us-bank-accounts/articleshow/61954812.cms

      • Prakash Parekh says:

        Thanks Jigar,

        I read that article and that is why I raised the query. I need to know what precautions I need to use if I am planning on moving back to India for good next year.
        I will be transferring my money from here to my Indian NRE account. But after that, should I close my US bank accounts or can I keep them for some time until all my finances are completely transferred to India. Please note that I will not be a RNOR after I return to India as I have not spent that much time outside India.

        Thanks
        Prakash

        • Prakash Parekh says:

          I forgot to ask one more thing in the above.
          Will US follow the similar due diligance process for identifying Pre-existing Accounts:
          (a) Account balance or value upto $50,000 – Exempt unless FFI elects otherwise

          Thanks
          Prakash

          • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

            1. If you are planning to move to India, make sure you comply with all US and Indian income tax laws and reporting compliance.
            2. You may continue holding the accounts in USA. However, you would need to report the same to the Income tax department in India.
            3. Once you return to India, you are not allowed to maintain NRE account but must transfer the balance to Resident account or the RFC – Resident Foreign Currency Account.
            4. The FATCA is for other countries to follow for reporting to IRS. I don’t think it is the same for other countries for reporting to India. Thanks.

  18. Sivakumar says:

    Hi Sir

    I am a NRI residing in USA for the past 10 years. as per recent government announcement, we need to update Adhar number by 31st dec 2017. i don’t have Adhar number. Because of this reason as per my friends suggestion i am planning to convert my Savings account to NRO account.

    But in Application form they are asking to enter Tax Identification number or SSN
    Since SSN or TIN is tagged to US residents. what ishte point to update SSN in indian account conversion? is it safe to submit SSN to indian banks? worried about providing my ssn. please advice, is there any alternative

    thanks
    Siva

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. NRIs are not allowed to have an Aadhaar.
      2. As an NRI, you are not allowed to have a resident account. You should have converted it 10 years ago.
      3. Yes, SSN would be required as the bank would report the account balance, and interest/ other information to IRS.
      4. SSN is mandatory so if you do not want to provide the same, you may not be able to invest or manage any accounts or investments in India or in any country outside USA. Thanks.

  19. Lilly says:

    Sir,
    In continuation of my just posted query regarding my NRI brother, what is the threshold value of accounts + investments beyond which the accounts will be reported to US authorities by RBI.

    Regards,
    Lilly

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      The mandatory requirement for FATCA is $50,000. However, the bank/country may report voluntarily for lower value accounts. Thanks.

  20. Lilly says:

    Dear Jigar,

    My brother is an NRI. During the time he was living in India, he had opened domestic bank accounts and demat accounts. My father has continued to operate these on his behalf.
    - Should we change the status to NRI
    - Should he declare these in his US returns
    - I see from your article that the facta deadline was Dec 2016. What happens due to the one year delay in declaration in my brother’s case

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      If your brother is US resident, the FATCA compliance started from July 1, 2014. he would need to report all the information. If he is not managing account, he may transfer the shares to his father’s account as gift and close the accounts. Thanks.

  21. AD says:

    Hello Mr Patel:

    You help is great for so many. Thanks for your service. Can you please shed some light on the attached news paper article. ” As per the order, fixed deposits in savings accounts opened before June 30, 2014 and December 31, 2015 will not have to be reported for FATCA and CRS, respectively.”

    BANKING
    Personal Finance
    ‘No need of reporting fixed deposits in pre-existing accounts’
    IANS
    20 February 2016 0
    New Delhi : The Indian government clarified on Friday that the implementation of the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards (CRS) will not entail reporting of all fixed deposits and auto sweep facilities in pre-existing savings bank accounts.

    “During stakeholders consultations, representatives of financial institutions informed that in such cases, no additional documentation is obtained for these fixed deposits accounts as they are intrinsically related to existing saving bank account and all KYC documents are available for the existing saving bank account,” the Central Board of Direct Taxes said on their website.

    As per the order, fixed deposits in savings accounts opened before June 30, 2014 and December 31, 2015 will not have to be reported for FATCA and CRS, respectively.

    The guidelines also said that for the upcoming reporting in March 2015 and May 2016, all reporting has to be done in Indian currency. For the reporting in 2017, Form 61B and Schema will be suitably modified to include a field for capturing the type of currency.

    India and the US signed an inter-governmental agreement to implement FATCA in July 2015, towards greater transparency between the two countries on tax matters.

    The decision will enable the government to receive information from the US and from other jurisdictions with which India has entered into agreements for Automatic Exchange of Financial Account Information (AEOI) as per CRS about assets of Indians held abroad including through entities in which Indians are beneficial owners.

    These steps are designed to help the government curb tax evasion and deal with the problems of black money.

    The measures will also result in financial institutions in India being FATCA complaint and they will not be required to enter into separate agreements with the US to avoid 30 percent withholding on their US source of income.

    Till now, the Automatic Exchange of Financial Account Information protocols as per common reporting standards have been signed by 52 countries.

    The Indian government has taken a leading role in international fora towards building a consensus among major economies that the problem of offshore tax evasion and flow of illicit money can be addressed only by free flow of financial account information to be exchanged among countries on an automatic basis.

    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this art

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      The FATCA is effective from July 1, 2014 and CRS is applicable from January 1, 2016. So any balance or accounts prior to these dates may not be shared with respective countries. Thanks.

      • AD says:

        Thank you so much Mr. Patel. Sorry, some further clarification.

        Does this mean accounts OPENED say in 2003 with a balance, say Rs. 4,00,000/- on July 1, 2014 and January 1, 2016 will be reported under FATCA and CRS respectively?

        Or, thats not the case.

        Please correct me if I am wrong.
        Thank you so much for your time and service Mr. Patel.

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          The balance as on June 30, 2004 and Dec 31, 2015 will be reported with account opening date of 2003. Thanks.

  22. Mohammad Arif Khan says:

    Hi Jigar,

    I am having a NRI & NRO account with ICICI Bank India, I am currently in Saudi Arabia with a private firm. My bank just ask me to submit CRS declaration. I am confused about this requirement. Kindly guide me in this regard.

    Regards

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Yes, you would need to complete the FATCA/CRS form giving tax ID or Iqama number. Thanks.

  23. Abhay says:

    I am from India and is now is an Australian Citizen since last 20 years. I have NRO account in India and has about Rs 3 lakhs,

    I have two question.

    1. I have invested in Mutual Funds for Rs 10 Lakhs about 10 years back and its value is now Rs 26 lakhs. I have converted my dollars deposit in India to invest in Mutual Funds 10 years back but not sure if I have proper audit trail to prove that I have converted my $ to Indian rupees.
    Question: What is the best option to take this money out?

    2. I have an apartment in India purchased in 1994 for about Rs 17 lakhs and is now valued as Rs 1.3 crores. I get regular rent as Rs 30,000 per month but also have maintenance expenses of about Rs 75,000 per year

    Question: If I sell that apartment then what is the best option for me to take money back to Australia or keep in India?. Where I have to pay tax? I do not have any Tax number in India as I left India about 25 years back.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. You must have a PAN – Permanent Account Number i.e. Tax ID in India as your income in India is more than 250,000 (Rent income itself is 360,000). You are also required to file your tax return in India. Also, the tenant is required to deduct TDS @ 30.9% on the rent payment to you (as you are an NRI). Without PAN you can not file tax return or would not be allowed to transfer funds out of India. I am surprised that you are allowed investing in mutual funds in India without PAN.
      2. I think there will be some money trail – bank account in India or Australia to prove the money transfer from AUS to IND.
      3. You would pay tax in India first as the source of income is in India. Also, you are required to include your Indian income in your Australian tax return. If you have paid tax in India, you would be allowed to tax deduction of the tax paid in India against your AU tax liability based on DTAA – Double Tax Avoidance Agreement between India and Australia. Thanks.

      • Abhay says:

        Hello Sir,
        Some clarification.
        1. The apartment at Pune is in my & my wife’s jointly owned legally.
        2. We have PAN cards, one on my name and other on wife’s name
        3. The rent from the apartment is deposited in out Joint account in India
        4. We were told that since the account is held jointly, the rent is also shared jointly and hence individual income is Rs 180,00o and hence no tax return is required.

        Regards

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          1. The person who made the payment is the owner of the property so if money was paid only from your account, your wife’s ownership is only for convenience. The property is considered to be only your ownership and all income belongs to you.
          2. Good.
          3. That is fine but TDS @ 30.9% needs to be deducted by the tenant.
          4. The 180,000 limit is for residents. The limit does not apply to NRIs. Thanks.

  24. Anil says:

    I am working in Belgium from 2015. I am an expat and ctax status for Belgium is Non resident for me. Now I opened a bank account in Belgium and it asked me to submit CRS declaration. It asks to list fiscal residence – “country of residence for tax purposes”. In this which countries I fill ? As per Indian regulations, I am out of India for more than 182 days in a year and I am Non resident. As per Belgium special taxation regime I pay Belgian tax only on income related to professional duties carried out in Belgium and claim Non resident tax status in Belgium. If I do not fill any countries and submit the form the bank says the form is incomplete and submit the form again.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      You would need to explain that you are not a tax resident of any country. I do not know the Belgium laws but I think if you are living in Belgium and working in Belgium, you may be a resident of Belgium. Anyway, you would have the same issue while submitting FATCA/CRS in India. Thanks.

  25. A says:

    Hello Sir,

    Thank you very much for the blog.

    I’m living in Netherland from Dec-2015 so now I’m NRI. I have not changed my status to NRI. I have resident saving account and salary account in India. I didn’t open NRE/NRO account as I didn’t aware of it completely.

    My questions are:
    1. How to change status to NRI?
    2. I’m receiving salary in India (Salary account). Now while filing IT-Return I want to make status as NRI. If I mention my salary account and saving account in ITR form, will it be problem?
    3. What can be done to avoid this?

    I’m in process of opening NRE/NRO account.

    Thanks!

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Contact your bank and where you have any finacial accounts/assets and inform them of your change in status.
      2. Are you an employee of Indian or foreign company? If both, it would be okay. Also, you may have an NRO salary account.
      3. Please include all accounts in your ITR and start the process to change your residential status to NRI and convert all accounts as NRO or invest as an NRI. Thanks.

  26. RAJ SHARMA says:

    Dear sir

    I am a NRI living in Abudhabi .My wife also have status of NRI & she is house wife & have not any earning income , i am interested in mutual fund investment by her name . my salary is not taxable here.I had done KYC for her. When I try to buy funds online ,Funds house asking for FATCA. I try to fill FATCA online but I am confuse. Please help me to fill FATCA online.Plase let me know what to fill in the following columns.
    1)Source of Wealth ?.2) Are you resident of any country other then India?.3) Tax identification no(TIN) ?4) Type of TIN.
    Kindly help me to fill these column
    Thanks & regards
    Raj Sharma

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would recommend investing in a joint name with your wife where you are the first holder, wife is the second holder and your kid as nominee. It will save a lot of present and future problem. You may have to delay your investing decision for a while till you complete the KYC formalities, but it would be real helpful for your long term investment plan. Short term pain for long term gain. Please contact us if you have any question or need any help for investing in India. Thanks.

  27. Mujahid says:

    Dear sir

    I am working saudi arabia bank has send us a self declaration form to fill amd submitt and in saudi arabia there is no tax on income working in service industry for non saudi citizen .then what detail we have to give to bank

  28. SAURABH BHAGWAT says:

    We are a venture capital fund and i have identified three accounts as reportable. One is an individual who is citizen of USA thus he is US reportable account. The other two are Entities whose controlling person are from Singapore and UAE. Thus these two entities are Other Reportable accounts.

    Now Form 61B allows me to choose only one out of US or Other reportable Type. REPORT TYPE is under A.2 in form 61B
    It says one statement can contain only one report type.

    Therefore, how can i report the other reportable accounts through the same form 61B

    Please help its urgent

    Regards

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      While you may have foreign investors, you may not have foreign owners. Please check. Also, if reporting is for foreign investors, they do allow multiple countries. If reporting of the ownership, please check who control the fund’s ownership and report accordingly. Thanks.

  29. Eman says:

    Hi Jigar,

    I just realised that FBAR due date is being revised to align with tax return due-date. I missed that date last month. I learnt from my friend that FinCEN has provision for auto extension for 6 months to Oct?

    Can I suggest if I have any option now to just file FBAR or Do I need extension approval from Treasury department and if there is any process?

    Thanks
    Eman

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I think there is automatic extension of 6 months given for FBAR so you would be okay to file FBAR by Oct 15. Thanks.

  30. Shahul says:

    Hello Sir,
    I was asked to submit FATCA form by my bank. I don’t have Tax Identification No or Tax Identifcation document. All I have is a SSN number as I am on H1B visa. Should I enter SSN details on the Tax identification number?

    Thanks,
    Shakul

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Tax identification number is the number by which you are identified by your local tax department. In your case as IRS identifies you through your SSN, it is your Tax Identification Number. Thanks.

  31. Rahul says:

    Sir ,
    This agreement was signed in 2015 and applicable to new accounts opened between 2014 and after , so what about accounts opened 10 years back , does disclosing that amount will create any problem . My cousin stays in USA from last 15 years, he pays TAX of that country and transferred to his NRE account back in India a good amount around 70Lakhs , which are inthe form of FD , he is expecting his Green card , due to lack of knowledge of this tax laws between two countries , he did not track any of these laws , now he is worried about this sharing of information under FATCA , what are the options left , he is thinking of gifting that NRE amount to his Mother and clean his account , as this NRE account was opened 10 years back . Kindly advice any way out , legally any tax to be paid he is ready , I mean he is an IT guy who can work on computers and not aware of any of these new IT laws , as he paid all his tax back in USA . sir , any advice is appreciated. Thanking you ,
    Regards .

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Gifting money and cleaning account before December 2017 would help for future year (2018 and later) and not earlier 2014-2017. I think it is too late for him now as I would think he would have given FATCA declaration and his SSN (tax ID) to the bank and the bank would report the value and interest to IRS in USA for 2014-2017. I would recommend voluntary disclosure under Streamlined Compliance and come clean. Please ask him to contact his CPA in USA for the same. Thanks.

  32. Arun says:

    Hello Mr. Patel,

    Thanks to you for making available such an expansive collection of guidance about NRI financial issues throughout your blogs and articles. About this article, I wonder if you might have any inputs on the following:

    Once a RFI/bank determines a customer to be US person (e.g. NRE/NRO account holder), under Rule 114G, do they aggregate all of the accounts this person might have (e.g. NRO+NRE+All linked FDs in these accounts) send the combined sum to ITD under the unique-customer ID, or, do they have to report separately account-number/FD-numbers alongwith balances of each individual account of this customer to ITD?

    I have been aggregating all of my NRE linked FDs’ amounts with max balance within the NRI account, and reporting it as a single entity under NRE account number on FBAR. I have no linked FDs in NRO account, and have been reporting it separately under NRO account number on FBAR. A few years ago, the bank used to send separate statements for NRO and NRE accounts under two different customer IDs, which is why I started reporting it on FBAR that way. But for last couple of years, the bank has started sending a combined account-statement under one customer-id, so now I am not sure any more if I need to change my FBAR reporting to separate all of the 9 NRE-account linked FDs from NRO and NRE accounts. Your thoughts/inputs on this would be highly appreciated. Regards.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I would think they will aggregate balance in all accounts with same customer ID.
      2. As you have been reporting all your accounts, although separate in NRO and NRE, you would be okay. There is no need to change FBAR. Thanks.

  33. Dheer says:

    Thanks for the informative compendium of information on NRI issues, and kudos for taking time to answer so many queries. I have a question related to this article, appreciate any inputs you could provide.

    I have multiple One-year FDs linked to my NRE account (some of which matured during 2016, and some mature in 2017). In previous years, I have aggregating the maximum balance within NRE account, and balances (with accrued interests) in all open FDs, and using this aggregated amount on FBAR under NRE account number. Now I am wondering if I should be reporting all of the FDs (open or closed during last TY) separately from the NRE saving account itself on FBAR instead of aggregating it all together.

    In this regard, my question is how are banks (esply. HDFC) required to determine if an account exceeds $50000 threshold for USA NRI? Is it required that they take the aggregate value of all accounts under the unique customer-ID as on 31st December of the year, OR, do they take the maximum value of all open and closed accounts anytime during the year?

    Secondly, once the $50K threshold is determined to be crossed for a customer-ID, do they report all savings and FD accounts in a calendar-year separately by their numbers? For example, in case of an NRE account with many linked FDs open and/or matured/closed during a year, would they be required to send the amount/open-close date information on all of them individually to comply with FACTA?

    Apologies in advance for repetition of these queries, if you have already answered them in other places – still going through the collection of blogs you have so generously made available online. Thanks again.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would think the bank would aggregate balance in all account and would report based on Customer ID. As customer ID is unique ID and maximum balance can be available for all accounts in one customer ID, I don’t think they will individually add maximum amount in all accounts but would tax maximum amount after combining all accounts. While this is the logical thing to do, I am not sure. Thanks.

  34. Arindam says:

    Hi,
    Having small doubt I was in USA from 2012 to 2016 on H1b, where in some time I was in USA and India both ,for a financial year. For one or 2 financial year I got Nri status (>187 days oo from India. My Indian account I have not declared as Nro/Nri account. And also I have transfered some amount in my wife’s account , so in that case does she need to provide self certification . She had no income in both country so her TIN should be declared on self certification as we filed us income tax return jointly on Usa or only Indian pan number.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. As you have returned to India permanently, you are an Indian resident for tax purpose. Also, as you are no longer a US resident (H1 surrendered/expired), you may not need to include your SSN/ your wife TIN.
      2. I would think that currently, you are an Indian resident and you are NOT a resident of any country outside India. Having an SSN does not mean that you are a US resident. Only if you have a greencard or citizenship, you are considered a US resident. Thanks.

  35. R Parikh says:

    I will be receiving inheritance money in India. Can I deposit this inheritance money directly from my father’s estate into NRO account?

    After money is transferred to NRO account can it be transferred to US checking account?

    What are the tax implications in India and USA for these type of transactions?

    Thanks for your help.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes, you can deposit the inheritance money directly into your NRO account.
      2. Yes, you can transfer the money from NRO account to your US checking account.
      3. There is NO tax implications in India or in USA, provided there is proper trail of money and documentation and requisite forms are filed. Thanks.

  36. MD says:

    Hello Sir,

    Your article is very useful and informative, thanks for sharing the info. I have a few questions as below. Appreciate if you could provide some response.

    My family member recently received written communication from a US based bank where NRO account is held regarding CRS compliance. But none of us have received any communication from Indian banks so far where similar accounts are held, which is a bit surprising given the dates mentioned in the article.

    Q1. Are different banks following different dates or Indian banks are not pursuing this seriously?

    Another thing – I am quite surprised the threshold for Non-US reportable account per your article is ‘zero’.

    Q2. So even if there are very small amounts held, is the IT Dep. still required report this to the other country?

    Q3. What is the implication of not providing this info, particularly when no income or very little income is generated in India?
    (Note: As per regulations in some of the countries it is not mandatory to provide the Taxpayer Identification Number (TIN) even to local banks. As such if you don’t provide they will deduct tax at the highest bracket, that’s all)

    Saw this mention in your blog above:

    “The required information of the accounts will be submitted online with data structure under digital signature and reported to the Director or Jt. Dir. of Income Tax (Intelligence and Criminal Investigation).”

    Q4 – Is this done when account holder does not provide the required info like the TIN?

    Thank You.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Different banks follow their own internal guideline and schedule for compliance. Also, it is possible that you may be holding the account as a resident with Indian bank and it may come as a lower priority for them.
      2. It would depend on which country you are from. For US residents, the threshold is $50000. However for others, there is no minimum threshold.
      3-4. If you have an NRO account, it will still be reported. As for NRO, the bank would have your foreign address and contact details and will be shared with the tax department of respective countries. The bank manager/CFO will need to sign the list before sending the same to India’s IT department. Thanks.

  37. MD says:

    Hello

    Your article is very useful and informative, thanks for sharing the info.

  38. nar says:

    hello Jigar, I have a couple of accounts – one a demat account with my indian bank and the other with a mutual fund which I have had opened before I left India 6 years ago. I just learnt about FBAR, OVDP etc. and was assessing my options. When they talk about the amount of money in the account, are the talking of interest/dividends etc only ? Or do they mean the stock/fund values even if they are not converted to cash ? Neither of my stock accounts cross 50k $ but I suspect the combination of multiple accounts may cross over if we look at stock/MF value.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. The amount of money in account means the balance and not income.
      2. As only financial assets are covered, which are highly liquid i.e. they can be converted into cash at the price mentioned in the statement for the particular day very easily. So stocks/fund values are to be included.
      3. Balance of all types accounts with all banks and MV of all financial investments are to be considered.
      4. Also, the threshold for FBAR reporting is $10000. Thanks.

  39. Bhojwani says:

    I am a senior citizen, a resident indian and a permanent resident in canada, I juggle my stay in the two countries to do so. I have no income in Canada where I stay with my daughter. I declare zero income there and pay no tax .In India I have my own flat and income from pension, shares, mutual funds and fixed deposits.I pay tax regularly and have income tax returns. Do I show my networth as value of house property plus investments?And tax status in both India ancd canada?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. You may only report your income. Reporting of net worth is not mandatory.
      2. I think your tax status would be resident in India. I think you may also be a resident in Canada depending on the days of stay in Canada and Canadian tax laws. Thanks.

  40. Akshay says:

    Hi Jigar,

    Thanks for writing this article. I hope to figure out the correct way to fill out Form 8938 with help from this article. I am, however, puzzled about one thing. Form 8938 asks details such as date of account opening, balance, etc. How do I obtain these details for my FDs in the NRE/NRO accounts maintained by banks in India. There isn’t standard schedule or form that banks in India use. How do I get details for each FD made or matured during the tax year?

    Appreciate your help

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would recommend to report your balance with Customer ID. You may add all your accounts and balances within the unique Customer ID and report them together. This will simplify your filing / compliance requirement. Thanks.

  41. Ravikiran Desai says:

    Hi, I am not US citizen or green card holder but on H1 visa since Nov 2013 in US. I do NOT have NRE NRO accounts as I was not sure how long to stay in US. My bank accounts in India are domestic/resident accounts. The balance in those accounts never exceeded $30,000 anytime since 2014. Do you think they can be considered for reporting? From all your blog and posts, it looks it will NOT.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. As you left India for employment to USA in 2013, you are an NRI since 2014-15 and required to update your status as NRI.
      2. It means you are not allowed to have a resident account but convert to NRO account and inform where you have investment to change the status to NRI. By not updating the status, you are in violation with FEMA provisions.
      3. That being said, if the bank does not know you are an NRI, they would not be able to identify your account as owned by US resident account and report.
      4. Even if you update your status as NRI, as FATCA threshold is $500000, your account would not be reported, unless the Indian government voluntarily decided to report all accounts to IRS, which is unlikely. Thanks.

  42. Sonal says:

    HI Mr Patel
    I have some queries if you can reply

    1 I am a NRI based out of UK ( now i am having UK passport) i have been investing in India Mutual funds in debt and equity but never took that money back to UK and tax as per Indian laws i have been giving in India for debt or ltcg for equities which is nil .. Now from now onward i am not sure what to be done for further investing in india as i have redeem all money and its lying in nre account in India
    2 can i send the money which is in my nre account in India to my son’s account in uk and in such i need not to pay any tax in UK for income earned earlier ( i am not sure i have to pay or not in UK for money Invested earlier in India)
    3 whats the best way to INVESTMENTS IN India in MF looking at tax laws from UK point
    if you can reply on these

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. As per FEMA laws, you are a PIO – Person of Indian Origin and are allowed to invest in India.
      2. Yes, you can transfer the money to your or your son’s account in UK. However, any UK gift tax laws needs to be checked.
      3. While there was no tax in India, being a UK resident, you would need to report your income in your UK tax return and pay tax on the same.
      4. Please contact us if you need any help or guidance for investments in India considering both India and UK tax laws. Thanks.

  43. Suresh Shetty says:

    Dear Sir,

    I have been asked by Canara Bank where I have my NRE account with, to submit FATCA self certification form.
    I’m an NRI residing in Muscat (Sultanate of Oman) since 25 years. I heard, but not sure, that the FATCA declaration is only meant for US NRI’s.
    I’m bit confused, therefore I would be very grateful if you would kindly let me whether I need to fill the FATCA form or not.

    Thank you in advance and appreciate your quick response on this.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      While FATCA is for US resident, CRS is for all other NRIs. That being said, you would need to fill the form. While Oman may not have a tax ID, you may include your resident ID number. Thanks.

  44. Sanjeev says:

    Dear Sir,
    Recently I got an email from Bank to update my KYC along with Self declaration for FATCA/CRS. I live in a European country and I opened my NRO account in 2014. As far as I know if the account is opened before 31 December 2015, the Banks need not asks customers about FATCA/CRS. Please advice if it is true.
    Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      FATCA/CRS is required for ALL accounts. After Nov 1, 2015, an account may not be opened without such declaration. For all previous accounts, banks have 1-2 years follow up with the account holder and to update their system. Thanks.

  45. Ramya says:

    how is the gross interest/income calculated for FD accounts in NRE account, for a US person. Say I opened a FD on Jan 28th 2015 for 5 lacs, which matures as 5,47,000 on jan 28th 2016. according to https://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/treasRptRateExch_home.htm . so how will the bank report interest for this FD. for the principal USD value there are only two dates close to jan 28th 2015 to find the exchange rate as per IRS, which is either dec 2014 or march 2015. say it picks dec 2014, the exchange rate on dec 2014 is 63.2 (1usd = 63.2 INR) , then 5 lacs is 7911 USD. will the maturity value will be 8276 USD ( going by 66.1 exchange rate on dec 2015 for 5,47,000) . so will the interest be 365 USD ( 8276 -7911) ? or they will ignore all this complication and just go by the end of the reporting year exchange rate , which is 67.8 on dec 2016, and calculate 7374 ( 5 lac ) & 8067(5,47,000) , and report an interest of 693( 8067 usd – 7374 usd) . the reason iam asking is , I have transfred 39k USD in 2013 to NRE , which due to exchange rate increase , has grown only to 41 K USD worth over 4 years. if I don’t calculate interest using the first method, iam actually paying tax to US for the money I dint gain at all.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I would just request the bank to provide the interest certificate for the calendar year (Jan-Dec) and convert the same by the year end exchange rate published by the US Treasury.
      2. As income from NRE is interest in nature, you may not be able to get the benefit of rupee depreciation on the principal amount. So, it is very important to plan your investments that complies with and give the best after tax return considering both US and India tax laws. Please contact us if you need any help with the same. Thanks.

  46. Ramya says:

    I live in US. I opened a NRE account in 2013 , with just passport details. until now, my bank has not asked for SSN number. my account might have something close to 49K $.
    1. without ssn number can a bank report to US ,
    2.if they report also, with just passport number , can US , trace back the SSN number ?
    3.. also how do we calculate the max amount in a calendar year? say for the year 2016 , I have 10lac in nre savings, 25 lac in fd with different maturity dates, few maturity date in 2016 and few in 2017. so the max amount for 2016 is 10 lac from nre savings, 25 lacs in nre fd, plus the interest accumulated in the fd which matures in 2016 alone. is my understanding correct?
    4. can I transfer all the money to US , close the nre accounts and be done with it?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes. They will eventually report as their records states that you are a US resident with US address and contact details.
      2. With your name, address, contact number, I think it will be easy for IRS to track you.
      3. Yes.
      4. Yes but you may still need to explain from where you got $49k to IRS. Thanks.

  47. Kumar says:

    Hi Jigar,

    Thanks for putting together the valuable info on FATCA.

    I am US based NRI working on H1B Visa. Currently i invested around $35K in Indian stocks and having $20K balance in my NRE account. Also in 2016, I earned interest around $1000 from my NRE account and dividends around $500 from my stocks in India. Please guide me what i need to do when I file US income tax.

    * What form i need to submit to report my India incomes(interest & dividend) when i file my US income tax?
    * Whether I need declare my investments (stocks & bank balance in India) to IRS and how should i do that?

    You reply is really appreciated.

    Thanks
    Kumar

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Location of income is not relevant. You would include the interest & dividend income in the respective section of IRS return/form
      2. As it is more than $50k, if you file single, it is above FATCA threshold, so you would include the same in your form 8938.
      3. You would also need to include the Indian account and assets in the FBAR form (FinCen 114). Thanks.

  48. Sunil Koul says:

    Dear Mr. Jigar,

    Thanks for the very informative blog. I have few questions and would appreciate your help.
    I am working in Nigeria and and my salary is tax exempted.
    Should i file returns in India and how ?

    Thanks in Advance.
    Sunil

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      If you are working out of India and receiving salary out of India, the income arises (accrues as well as received) out of India. For an NRI, any income that arises outside India is not taxable in India so you are not requried to file tax return for your income in Nigeria. However, if you have any income in India which is more than Rs. 250,000, you would be requried to file tax return in India. Thanks.

  49. Prem says:

    I am an NRI living in USA for around 8 years.
    I have bought 2 properties in India so far with my US income and both have been registered now. Both the properties are vacant and not rented out.
    a) First one is a Flat – it was on loan, registered on my name in 2014 and I paid off my loan recently in 2016 and loan account is now closed.
    b) Second one is a land plot, registered on my wife’s name – paid through cheque from her savings account in India with remit from US. She is a homemaker and stays with me in US.
    Few things I realized recently as below and seems I did not do right due to negligence of law.
    - I never maintained a NRE account and have transferred amount directly to my or her savings account for payment toward the properties.
    - I have not shown both the investments in US tax filings. Neither I took any benefit on my loan interests either in India or US filings.
    - I have a FD on my name whose yearly interest is around 50K INR only and gets auto renewed every year. The interest adds up after deducting TDS but I never filed for it.
    - Since I do not have any other income in India, have not filed my IT returns from last 8 years.
    - I have 2 bank accounts in India out of which I got one of them converted to NRO recently and opened an NRE as well for future transactions.
    - My wife has 2 accounts and both are still savings only.
    Please suggest – what should be my best next steps so that I do not run into any legal issues now or in future ? What is the best way to correct/protect myself, wife & my properties ?
    Thanks & Regards,
    Prem

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Your best next steps would be to operate/convert your wife’s bank account as NRO/NRE, report the accounts ans assets to IRS if the balance in the account is above thereshold, inquire your CPA about voluntary disclosure scheme. If amount in India not higher than $50,000 after June 30,2014, the bank may not report the information to IRS. You may want to close your old resident accounts. Thanks.

      • Robin says:

        Hello Mr Jgar,

        Great article, many thanks.

        I have a question regarding NRE FDs maintained by US Tax Resident. It is multi year FD that started before I landed in US in 2015. For 2015 tax return, CPA here in US recommended to declare interest income when it matures and money is received in account. Hence I never declared interest even though account was declared in both 8938 and 114. Now, I am confused as to what will India bank report to IRS for such multi year NRE FDs. Do Indian Banks need to report accrued interest as well even though it will only be received when FD matures?

        Pleas help. Appreciate you helping us.

        Regards
        Robin

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          1. The reporting of bank would vary and depend on the bank’s internal system. There are still some banks that report interest only when it is paid (even on the interest certificate).
          2. I would recommend to be consistent in how you report your income and assets so it is better to explain, if there is any inquiry. Only downside of reporting income when received is that the year in which FD matures, your income would be very high and may increase your tax slab. Thanks.

  50. Shah says:

    Hi Jigar,

    I m Us citizen
    If I will open NRE accounts in different different bank with average $20000-$25000.
    Total Pprox $100000-$150000
    As per FATCA whether my account will be reported to IRS

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Unfortunately, I can’t say for sure. The $50,000 limit is per account so may not be but if it is consolidated by IT departments, it may be. It would depend on how all different banks, where you have $20000-$25000 report to IT department. Please note that as a US account holder, your account will be flagged in the system. So, in future if the CBDT issues a notification to report all account balances of NRIs, it will be included. I would not advise you to take such risk. Instead, you can invest in India in a way to reduce your effective income and tax. Please contact us if interested. Thanks.

      • Khurram says:

        The account balance of minimum $50,000 will be calculated as an aggregated balance amount instead of balance available account wise. However, if the accounts are maintained with less than $50,000 aggregated balance (Threshold Limits provide by the regulator & IRS) with other FFIs then the accounts or CIFs will not be considered for review, remediation and reporting purposes.

  51. NOOKARAJU AMARNATH says:

    dear sir
    really thanks to you for asswering many queries. Iam an NRI working in gulf since 2013. Till to date i didnt receive any information from my bank (SBI) to submit any information. i hav fixed deposits in my NRE accounts and iam earining interest on that . the manager told me both external income and interest in not taxable. now is there any tax do i need to pay as per the new regulations . i have not invested money any where .

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I think the gulf countries do not tax their resident’s foreign income i.e. your Indian income. Also, the NRE bank FD interest is not taxable in India. So, you won’t have to worry. FATCA/CRS is not a tax but a mechanism to share information with different countries so if anyone is not complying with the laws of land, an inquiry can be made or notice can be issued. Thanks.

      • JD Chaudhary says:

        I am working in Saudi Arabia from 2010 and there is no tax on income . bank require to submit FATCA-CRS form. they mentioned in form that to provide TIN but I do not have TIN because here no tax so can you advise me what I have to mention instead of TIN.

  52. Samir says:

    Hi Jigar,

    Many thanks for this lovely detailed article :)

    I am a bit confused and needed a bit of your advice.

    I live in london so i would be under CRS i guess.

    Me and my mother both have a NRE account in india.

    We both have FDs which total to roughly 40k each over 10/12 years!

    We have never withdrew anything out but have had it on renewal for the last 12/14years, which through interest has got us upto £40k

    We were told that we would not have to pay tax in india as it is NRE account.

    My mothers FDs also have my name on them as a nomination second person.

    What is the best way to submit a return? From what i understood was, i would only have to pay taxes and declare, once the money physically leaves The account in india and it comes in my UK account?

    I am not sure what to do?

    I received the forms for me and my mother yesterday from
    State bank of india mumbai. I have 15 days to submit and give my details!

    Could you please advice me?

    Many thanks for your kind help.
    Regards,
    Samir

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. You are okay as per Indian tax laws. The objective of CRS is for banks to gather information and submit to income tax department of India, which in turn will share with the tax department of UK (HMRC) for them to determine if their residents are paying taxes as per UK tax laws.
      2. I think you would need to report interest on accrued basis. Also, when the FD matures, I think it has the same meaning of withdrawal (cashing out) of interest. However, I would recommend you to contact your CA or CPA in UK to understand how to report the India income in UK. Thanks.

  53. Joseph Bastin says:

    Hello, sir -

    The reporting date for FATCA is 30th November, 2016 in Kuwait.
    So, I’d know if I should be reporting for up to 30th November, 2016 or a fixed period, for example; ’1st July, 2015 – 30th June, 2016′?

    Thank you!

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I am not sure of different date as FATCA is to be applied uniformly for all countries. The deadline for you to submit FATCA declaration may be different. But if your account is flagged as US resident account, data from June 30, 2014 will be shared.
      2. If I am missing something, please elaborate as I am not able to understand your question. Thanks.

      • Khurram says:

        IGA itself is clear with all the reporting dates and as per the IRS requirements all the regulators shared the universal reporting deadlines to their respective FFIs.

        However, FATCA reporting for 2016 was already done in May 2016. Now the next reporting needs to be done in 2017.

        Regards,
        Khurram

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          Still all financial account – bank, mutual funds, Demat are not been updated with the revised KYC details so I would think the reporting would be done in piecemeal over a period initially. Thanks.

  54. Rajagopal Rao M says:

    Hi,
    Your blog and article is very useful.
    I have not been able to get information whether FBAR needs to be reported if a US resident name appears in Accounts held by parents in india under the heading NOMINEE : who has no signing authority and comes into picture only on the demise of account holders . Both in Bank accounts And Brokers account ( DEMAT).
    Can you calrify this point .

    Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      On demise of parents, the nominee (who is also a legal heir) would become the owner of the funds. You would need to report the same as “inheritance received” in your name and report in the FBAR and/or FATCA form 8938 as well as report any income from those assets after the death of the parent in your US tax return. Thanks.

  55. Y.Ahmed says:

    I am Belgian resident . I draw pension from Belgium which is deposited in the the bank there. I am an NRI. I have FD deposit and 2 Mutual funds in India. The interest is consumed in India. The total amount of Investment is $45.000/- and income is
    $4.000/-. Will this be noted in the FATCA and have I to pay something?
    Is it advisable to transfer my residence to India so that I am away from higher taxes.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      As a Belgian resident, CRS would apply. If Belgium tax your Indian income, you would need to include the same in your tax return in Belgium. The consumption of interest is secondary. Income is primary on which you are required to pay tax. If you pay tax in India, you may get the tax credit in Belgium for taxes paid in India. I don’t think this is very material amount to make a decision about transfer of residence. Please note that if you become an Ordinary Resident, your foreign income (pension in Belgium) may be taxed in India. Thanks.

  56. rachelle go says:

    Great Article. post . I loved the information ! Does someone know if my company would be able to get ahold of a sample IN HSBC Self Declaration Form version to work with ?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      The declaration would be the same for all the banks. Just google the form for non-individual. For a company, UBO – Ultimate Beneficiary Organization form may also needs to be submitted. Thanks.

  57. veeru says:

    Hallo dearest sir.
    I am in CRS Country. Please let me know If some account is closed in mid 2014 with Indian bank, will it be reported to other crs domicile country or not?
    My 2nd Q is: The existing accounts which will be reported, will they be having the Details from the date of account opening time or just of 2015 or 2016.
    With warmth
    veeru

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I don’t think so as the CRS is applicable from Dec 31, 2015 in India.
      2. The reporting will show balance as of Dec 31, 2015 and then transactions form 2015 calender year. They may include date of opening as a guide but no transactions would be included. Thanks.

  58. Natraj says:

    Greetings,

    It is great help and guidance you are giving here.

    My brother a US resident have been filing returns in the US since 2009. In 2012
    our mother expired and as a result he inherited around 50k usd in India in the years 2012 and 2013. He had invested the amount in India as FDs in multiple banks using his Indian address and had income around 5000 USD per year as interest, over the years. He has not filed FBAR, though non-wilfuly as he was not aware of the income at the time or has declared this income in his US returns. His tax returns in India too was not filed till fy 2015-16 as there was delay in getting the PAN which he got in July 2016 only. In FY 2016 the returns were filed in India under NRI category. He plans to pay taxes if any and file returns in India from 2013. What must he do in this regard, especially in the USA. Any advise will be highly appreciated. Thanks in advance,

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Usually, PAN is allotted in 4-6 weeks. I am not sure why it took so long in your case.
      2. IT returns for upto 2 years can be filed. So, he won’t be able to file older returns (for 2013-14 and earlier years) in India.
      3. I think he need to include the interest income in his tax return and pay tax and interest. He may also have to pay penalty. I suggest to contact his CPA and seek his guidance.
      4. He may close the account and transfer funds to others as gift if he does not want to report but there would always be some risks and he needs to take certain precautions for transferring and/or carrying out transactions in India. Thanks.

  59. Nandakishor Yaragatti says:

    Dear Sir,

    Thank you for sharing the article.

    Please advice me, following is the situation
    I moved to US in July 2015.

    I have already 2015 filed income tax returns for 2015 in US.
    I have not submitted FBAR for 2016 and form 8938.
    Should i file a amended return and file FBAR and form 8938.

    I have not file my IT returns in India for April 2015 to March 2016. Should i file it now?

    I have axis bank account in india, wherein total credit was around 13,00,000 INR from Jan 2015 to December 2015.

    Should i request the axis bank to convert my account NRI?/required

    I have 30,886.24 INR in AXIS LONG TERM EQUITY FUND – GROWTH, which is locked for 3 years and i did not do any SIP in 2015. How should i deal with this?

    I made LIC retirement plan premium payments till Sept 2015(Only one payment through US source of income), but after that could not do the same, because of the financial issues.

    Dumped all the indian shares total worth of INR 85,000. Lost arount 20,000 INR. in November 2015.

    Bought INR 12,000 worth of shares in BSE, India in December 2015.

    I have been asked to submit FATCA/CRS self Certification from SBI Capital Securities, where in I have no stocks.

    Please let me know what should i submit under Country of tax residency:
    a) Any other country.
    b) India and other country.
    c) Only India.

    Also I have been asked to submit FATCA/CRS self Certification from Sharekhan, wherein i have 10,000 INR worth of shares.

    So should i declare the tax residency of both US and India.

    And also it asks me to accept that i am not resident of US or a US person.

    Please provide me your valuable suggestion.

    Thanks,
    Nandakishor

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes, I would think you need to file your tax return and any other forms that you have not filed. I would recommend you to consult your CPA for the same.
      2. For Indian tax return, you would need to file tax return only if your income in India is more than 250,000.
      3. You can not withdraw ELSS fund so you would keep the investments in the Axis LT EQ fund.
      4. I don;t think your financial assets is more than $10000 (Rs. 650000), so you are not required to file FBAR/FATCA.
      5. Currently, you are a tax resident of USA. You are not a resident of India.
      6. See 4. I would not recommend lying as it can be evident from your passport that you are a US resident for tax purpose. You may close the account as you only have Rs. 10000 worth of shares with them. Thanks.

  60. Steven C says:

    Thank you for a very informative site. Just want to make sure I understand the US reporting correctly. Can you confirm if this is correct – Assuming the value of assets in all NRE and NRO accounts of a person is below $50,000, the bank or Indian government will not report it to the IRS.

    Background to this question – the bank in India has asked for my passport #, SSN etc. which I have not provided before as far as I remember, so then started looking online and found your site. My Dad set up an NRE and NRO account for me over 30 years ago, with a small amount of money. These are accounts I don’t even remember opening or may have forgotten until my Dad passed away about 5 years ago, because I did not get any statements or mail from the bank in the States. The accounts now have the equivalent of about US$40,000 (thanks Dad!). So just wondering if they will be reported to the IRS because it is under $50,000. I should have just closed those accounts after my Dad passed away, but never go around to doing that, but will probably will do that now. I’m just wondering what the implications are after I provide the bank my US passport details, SSN # etc. Not trying to avoid taxes, (I think they withhold taxes from one of the accounts), just lazy I guess! Appreciate the help.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Thank you for your comment. Please post with correct email if you expect a correct/proper answer. Thanks.

  61. sourav says:

    I am an nri living in US holding india passport. These days banks in india are asking me to fill up FATCA form where they are asking for SSN. Is it mandatory to share that number with Indian authorities?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      It is a requirement under FATCA/CRS declaration to disclose the tax ID of your country of residence so when the Indian tax department share the account and income information to foreign country (IRS of USA), they will be able to check whether you have properly disclosed your Indian income and/or assets as required. Thanks.

  62. Seth says:

    Dear Sir,
    I am working in India on OCI visa holding Foreign Passport (Non-US).
    My office has opened a Salary Account where my salary is deposited after the IT and other deductions.
    My query is:
    1) when I quit my job, is it better to keep this account active or should I close the Salary Account?
    2) Right now since it is Salary account I can keep NIL balance, but when I quit and No salary comes in it, after 3 months it would be converted to Savings Account where min. deposit is 10k. So if I need to keep this account active I would need to transfer some amt. periodically to maintain this balance. Would this be taxed?
    3) Since I hold a foreign PP, what account would be necessary to hold? NRO or NRE? What is the difference between them? Which is beneficial?
    4) Would keeping an active bank account be deemed that I need to file taxes or declare my savings / salary earned abroad?
    5) Looking at the different changes in the financial account account procedure, would it be better to open a fresh account when I do plan to work again in India in the future?
    Just confused and need your guidance. Thanking you.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. It is a personal decision. You may keep it or close down. I would close as one less account to manage.
      2. You just keep 10000. No need to transfer amount. Interest on the 10000, however small (about 400) would be taxable. However, you would get 80TTA deduction from interest on savings account of upto Rs. 10,000.
      3. As you are in India, your status would be resident and you would open a resident account. NRO/NRE account are only for NRIs.
      4. It would depend on your residential status.
      5. It is always advisable to keep the minimum possible bank accounts.

      • Seth says:

        Mr. Patel, I would like to thank you in advance for your time and advice offered.
        I am Foreign PP holder, with OCI visa; *I came 6 mnths back for a job here where the co. opened my Sal acct; *As I’m quitting this job, I went to the bank to close my sal acct. they gave me Fatca form. Can you advise me on my foll queries:
        1.Whats my Status: Resident Individual/ Foreign National/ NRI/ PIO? (there is no mention of OCI which is different than a PIO, acc. to the Visa Rules.)
        2. Does, being Indian by birth, make my Nationality INDIAN?
        3. I am not aware of TIN number, so what can I give instead? Is the OCI Visa no. a valid option?
        4. Since I am working here now, what would be my country of Tax Residency? (My IT is paid every month here by my present Co.) I am completing my job and wish to close this Salary account, what should I select: Tax resident of India OR Tax resident of foreign country? My IT is deducted from the Salary earned here.
        And if it necessary to choose foreign country? I do not want that it makes me pay IT back in the home country since it would make this costly. If I mark it as Resident Indian then I do not have to go through the necessity of giving these details to close my salary account. What is your suggestion?
        5. The Company I work for has deducted IT and since I ‘ll be quitting the job in 11 months (makes it less than a year in India), they say that I do NOT need to do any further filing of IT at a later stage or in the following years. What is your opinion?
        6. Since I am a salaried person working on one job, I have some limited saving abroad but do I have to share these details with the Tax authorities here? I do NOT have any business or property investments in India/ abroad.
        7. Are these meager savings abroad taxable in India OR would I have to share these details with the authorities here? 
        8. When I begin my New job, most probably abroad, do I have to file returns or pay tax in India as well, since that salary would be taxed abroad as per their IT rules?
        9. Is giving all this tax information going to make me pay Tax there as well as in India, even though I am a salaried person working One job. (I hold an foreign PP with OCI status.)
        10. Is there any obligation if I worked here now, that hence forth in the future, I need to keep paying taxes even if I work abrd? (I do not have any investments/ property here)
        I am really confused so seek your solemn advice.

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          1. You would need to check whether you are considered as a resident in your foreign country as per the tax laws of the country. Only then, you will be able to answer / complete the form properly.
          2. If your Indian income is more than 250,0000, you are required to file the income tax return in India.
          3. I am not sure if you worked in India for 6 months or 11 months. Anyway, your residential status in India would depend on your actual stay in India. Only if you are an Ordinary resident (which I don’t think you are), foreign income and assets are required to be reported in India.
          4. You would need to check tax laws of both India and foreign country to understand taxability of your income in India and foreign country. Thanks.

  63. DsRao says:

    Mr.Jigar Patel – Please provide an update on the progress of the proposed FATCA relief “Same Country Exception”

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      It is not yet part of FATCA. There is a strong support but as it is not a law now, don’t want to comment. Thanks.

  64. Mihir Shah says:

    Hi Jigar,
    Thanks for the very informative blog. I have one question on joint account holder reporting.

    I understand that under Form 8966/ Form 61B (for Indian FIs), joint accountholder details are to be reported with the ENTIRE balance. Say, if Mr. A and Mrs. A have a account with bank XYZ with account balance of $890,000. Both Mr. A and Mrs. A will be reported with the entire balance of $890,00. This is kind of dual reporting.

    However, when a U.S. resident files Form 8938 or under FBAR reporting, the account balance with be reported only once by Mr. A by showing his wife as joint holder.

    How will IRS match reporting under Form 8966 with Form 8938? Wouldn’t dual reporting under FATCA mislead to non-disclosure of income by joint holder?

    Would appreciate if you could throw some light on the matching concept.

    Thank you in advance.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      The FATCA or FBAR asks if the account is jointly held with the spouse. If you check that box, I think you are okay as the highest balance would be the same. Thanks.

  65. EQUITY2025 says:

    1. https://home.kpmg.com/content/dam/kpmg/pdf/2016/04/tnf-wnit-fbar-apr4-2016.pdf

    Harsher penalties can be imposed for willful reporting failures. If
    willfulness is found, the total penalty for all years under examination will
    generally be limited to 50 percent of the highest aggregate balance of all
    unreported foreign financial accounts during the affected years (but in no
    event will the penalty exceed 100 percent of the highest aggregate
    balance of such accounts).21 For purposes of this penalty, the violation is
    considered to have occurred on the due date for filing the FBAR. Thus, the
    IRS will use the balance in the foreign financial account at the close of
    June 30th in calculating the penalty. The IRS’s Internal Revenue Manual
    provides that “[t]he test for willfulness is whether there was a voluntary,
    intentional violation of a known legal duty.”22 ”

    —————————————————————————————————

    It is interesting to note that the above article from KPMG states “For purposes of this penalty, the violation is considered to have occurred on the due date for filing the FBAR. Thus, the IRS will use the balance in the foreign financial account at the close of June 30th in calculating the penalty. ”

    Example:

    2010 fy – needs to be reported on June 30 2011
    Highest balance in the account between 2010 jan – 2010 dec = 50,000 dollars
    Balance in the account as of June 30 2o11 = 1000 dollars

    In a scenario like the above what will be the penalty both willfull and non willfull ???

    2. How years are we expected to financial records – 5 or 6 or forever ?

    • EQUITY2025 says:

      What is the different between ‘US resident NRIs ‘ Vs ‘All NRI’s’ ?

      Does ‘US resident NRIs’ mean those NRIs who are living in USA ? If YES, then does that mean ( as per the above article ), Indian resident US citizen or green card holders will not be reported for 2014 and 2015 ?

      Please clarify.

      • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

        Accounts/assets of NRIs from US will be reported from June 30, 2014 and of NRIs from other countries from Dec. 31, 2015. Thanks.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Good to know but I think calender year would be considered. However, please check with your CPA. Thanks.
      2. The requirement is different for different laws. However, I think, generally, you are required to keep records for 8 years. However, if you are at fault and not paid tax due (communicated to you but did not pay), IT can go back as many years as they can. One of my client had received a demand to pay tax of Rs. 500 related to 1990, 25 years back :) . Thanks.

  66. FBAR Filer says:

    Dear Sir,
    I moved back to India for good in 2012. I am US Citizen. I had been filing my FBAR timely manner. I had heart attack on 6th June 2014 and had to be operated. I was hospitalized. I couldn’t file my FBAR for 2013 and 2014 due various health issues post attack.

    I have recently filed my 2015 FBAR in June 2016 month as well as FBAR for 2013 and 2014.

    Do I need to take any other action in this regard?

    Thanks for your help. Much appreciated.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would recommend you to contact your CPA in USA and evaluate your options. you may also need to consider the Streamlined Compliance. As you have been living out of USA, there is no penalty provided you have paid tax on Indian income in USA. Thanks.

  67. a@b.com says:

    Wondering whether following items re-portable in FBAR?
    1. NSC (National Saving Certificate)
    2. Life insurance policy from LIC.

    Thanks!

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I think NSC is a foreign financial asset and needs to be included in the FATCA Form 8938. However, I am not sure if NSC is a foreign financial account and needs to be reported in FBAR.
      2. About LIC, FBAR specifically mentioned that cash value of insurance needs to be included. Thanks.

      • a@b.com says:

        thanks for reply.
        What do u mean by cash value of policy? is amount of premium paid so far or surrender value of policy as of date?

        thanks in adance.

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          Yes, Surrender value for LIC and balance amount for ICICI. Thanks.

  68. A says:

    Hi,

    I owns a property with my father. The share certificate has my fathers name first and my name is second. The property was originally owned by my grandfather. My father plans to sell the property and buy another one. Can I transfer my share to my father and thus avoid declaring and paying capital gain tax?

    Your response will be greatly appreciated.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Just having your name as a joint holder on the share certificate does not make you an owner of the property. However, the transfer from your grandfather to your father needs to be analyzed. If he gave property to both of you as a joint holder, you would be an owner. If the property is transferred only to you father and your name was just included for convenience, you are not an owner of the property. In that case, all money will be paid to your father and income/investments would be of your father only and you would not have any compliance requirement in USA. Thanks.

      • A says:

        Thank you Jigar for your quick response. The share certificate was initially under grandfathers name then in my aunt’s and dads name. I bought out my aunt’s share before coming to USA. So it has my dad’s name first and my name second. However there was no formal agreement for buying out share. And also I didn’t do registration. What’s the best option so I don’t have to declare it?

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          You would have paid for buying your aunt’s share so I would recommend that you do registration/documentation for the same. In that case, you would own the property and need to pay tax in India. You would also need to report the capital gain in USA and pay tax in USA. However, you would get the credit in USA for the tax paid in India under DTAA. Thanks.

          • A says:

            If I give power of attorney from USA to my dad to sell the flat and the check comes in his name will I still be liable for the taxes? Is there any another way out where my dad can sell the house without me and I won’t be liable for taxes?

          • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

            I explained you the right way. While you may do as you please, you would be taking a risk that no one finds out – neither buyer, nor bank, nor Income Tax in India nor IRS. If you are the rightful owner, buyer may not want to take a risk by paying everything to your father as you may come back and say you never got the money for your share. Thanks.

      • A says:

        Thank you Jigar for the input. I know your way is right and I appreciate it. Time and money are the major constraints for me. My dad wants to sell it by September and I won’t get that much of leave. Max. will be 15 days. Does your firm or anyone you know of assist in registration and selling of the flat for NRI’s and also the tax return to be filed in India?

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          We help for consulting during sell for TDS, money transfers, tax payment, filing returns, etc. We do not help with registration of property as it is usually done by the civil or real estate lawyers. Please contact us if you need our service. Thanks.

  69. Resident Indian says:

    Hello,
    I just moved to india last year and have to submit my FBAR. I am director in one Pvt Ltd company and have more than 50% stakes and one 50:50 partnership company in India. I am signatory in bank accounts of companies.

    Under which section of FBAR form I should report above company details? Joint account?

    I have to file my FBAR before June 30 so your early response would be great help and much apprecaited.

    Thnx

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I don’t think you would report as joint account as it is not owned by you. I would think you need to submit as Signatory authority. However, please check with your CPA. Thanks.

      • Resident Indian says:

        I am in India and never needed CPA in USA as filed my taxes with HR Block. so don’t have any CPA in touch. Is this something you can help or suggest any CPA who can help me in this regard as I have very less time.

        Thanks for help

  70. Chakra Kiri says:

    Mr.Jigar Patel

    Reading the queries posted by a lot of folks requesting your answers, one thing is clear that there is a lot of worry and fear. On the internet, there is a lot of misinformation. When one reads the content related for FBAR 114, it is written in such a way to make it look as if IRS does not make a distinction between wilful/non wilful mistakes in filing, and also as if there is no difference between accounts having 1 dollars versus 1 million dollars, and that all cases will be treated and penalised the same i.e. 100,000 dollars or 50% of the funds in the account which was not declared.

    But when goes through the below link ( scroll all the way down and look at table with the heading ‘FBAR Penalty Mitigation Guidelines – Per Person Per Year’), one will realize that IRS is very reasonable even in the case of wilful cases.

    https://www.irs.gov/irm/part4/irm_04-026-016.html

    For example for a Level I-NW Penalty non wilful case is 500 dollars per violation, and the same for a Level I-NW Penalty wilful case is 1000 dollars or 5% of the aggregate maximum value of the unreported accounts.

    It is only for those accounts exceeding 1 million dollars thathe wilful Level 4 penalty is ” 100,000 dollars or 50% of the funds in the account which was not declared. “. Is that correct ?

    The truth is that majority of those who did not report FBAR have very minuscule amounts in their amounts, and what is holding them back is the fear and worry of their lifetime earnings taken away by IRS, for defaulting to report accounts have may be a few hundreds of dollars and a few single or double digit dollars of interest in their foreign bank accounts.

    There needs to be more friendly communication from IRS as to how they will not break the life of person of a honest hard working person who has toiled for years to make his savings and has made a few wilful or non wilful mistakes amounting to very small amounts of dollars in unreported foreign bank accounts. While IRS itself has made their intentions very clear via the above link and other material on their website, the third party information and commentary seems to be adding to the confusion and causing havoc, worry and fear in peoples lives.

    Please comment on ”FBAR Penalty Mitigation Guidelines – Per Person Per Year’)’ in the link provided above.

    For example for a Level I-NW Penalty non wilful case is 500 dollars per violation, and the same for a Level I-NW Penalty wilful case is 1000 dollars or 5% of the aggregate maximum value of the unreported accounts.

    It is only for those accounts exceeding 1 million dollars thathe wilful Level 4 penalty is ” 100,000 dollars or 50% of the funds in the account which was not declared. “. Is that correct ?

    –Chakra

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Good research. I agree that many would not know this. However, I think the fraud mitigation penalty may not apply to “typical NRI”. To qualify for mitigation, a person mush meet 4 criteria. I think while most of all NRIs will be able to meet first 3 criteria, they will fail the forth: “IRS did not determine a fraud penalty against the person for an underpayment of income tax for the year in question due to the failure to report income related to any amount in a foreign account.”

      As Indians would not have reported the interest income on their Indian investments (NRE bank savings or FD accounts) in their US tax return, I am not sure if they can qualify for the same. However, this is my personal opinion. Thanks.

      • Chakra Kiri says:

        Mr.Jigar Patel

        My post/question was not about those who have stashed away huge amounts of money in NRE savings or FD accounts and have not reported.

        It is about those who have reported everything in their US tax returns, but have failed to report those accounts which have miniscule amounts with even lesser income as interest. For example having 50 dollars in account with 2 dollar as yearly interest.

        1. When someone declares all his income and fails to report an income like the above, will they also be subject to Civil Fraud Penalty ?

        2. What about those who have unreported income, but even if that income is added to a given year’s total reported income, the respective person’s total income is below taxable limit t i.e. despite adding the unreported income the tax payable is zero. This is very much possible in a scenario where a person has miniscule non reported income like the above and has foreign tax credit from previous year ?

        There can be no definitive answers for the above queries, what is being requested from you is an opinion.

        Those people who fall into the category described above should be given a one time opportunity to just declare everything and get on with their life.

        - Chakra

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          1. If you have $50 in an account generating $2 income, you are not required to file FBAR. FBAR requirement is only if you have more than $10,000.
          2. I would think if you did not report ANY income, it may be considered as under-reporting of income and subject to penalty.
          3. If even after adding under-reported income, the total income is not taxable, NRI should file and/or amend the tax return.
          4. In my experience, NRIs would have interest on NRE account, which is taxfree and as no tax is paid in India, foreign tax credit is not available. I don’t think NRI would have declared and paid the tax on the income that is exempt from tax in India.
          5. The one time opportunity is available in the name of Streamlined Compliance (non-wilful) and OVDP for US residents. Thanks.

  71. Sai says:

    Mr.Jigar Patel – Thanks for the amazing clarifications and information you are providing.

    1. You have mentioned about being nominee on the bank accounts instead of being a joint account holder. But you are expected to report amounts in bank accounts where one is a nominee only. Isn’t it ? If YES, then does it apply for both form 8938 and form 114 ?

    2. In one of the responses, you have recommended parents executing a WILL in the name of their children who are citizens of a foreign country. Can you please expand on that ? How does a WILL help ?

    3. Will there be inheritance tax in USA based on the properties being inherited in a foreign country from such a WILL ?

    Rgds
    Sai

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Form 8938 or Form 114 (FBAR) only apply to OWNERS (single, first or joint) and do not apply to nominees.
      2. It simplify the transfer of assets and helps to prove the nature of transfer as inheritance.
      3. There is no inheritance tax in India. As your parents are Indian residents and not US residents, there is no inheritance tax. Also, foreign gift/inheritance is not taxable. However, a form needs to be sent to IRS about the same. Thanks.

      • Kenny P says:

        So, in the case of assets that were inherited, what should be the right way to report it when parents pass those assets to NRIs resident in the US?

        In my case, the assets are in the form of FDs and Real Estate and those were originally assets with me being the nominee. In this situation, should the FBAR/FATCA filing be done from the date of the passing of the parent, or can it be done from the date of the assets / valuations being discovered/uncovered, or is there a way around the reporting completely since these were not originally NRI owned assets?

        Finally, the accounts were operated for years with my name in some accounts as a resident Indian with a PAN number issued from the day the PAN system came out. Does that play into this situation? If so, how?

        Thank you so much for such great input and advise. Your knowledge is amazing.

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          1. I would think the date you became the owner, you need to report. As per legal terminology, nominee has right to receive funds on death and now Own. Ownership is by Will or by legal heir process. e.g. one person has 2 kids but only 1 is the nominee. If assets to be shared equally, only when money transferred to respective kid, he/she becomes the owner.
          2. If you own as a first or joint holder, you would need to include the same in FATCA/FBAR. Whether it is held as a resident or with or without PAN does not matter. Thanks.

  72. Sam says:

    The reporting threshold under FinCEN Form 114 is $10K and you are saying $50K.
    The threshold of $50K is for Form 8938.

    Do you mean that If total amount in all the foreign bank accounts is less than $50K then we donot have to do anything?

    https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. FBAR limit is and has always been $10k. I never said FBAR limit is $50k.
      2. FATCA limit is $50k i.e. form 8938.
      3. India and other countries will be sharing information of US residents account as per FATCA, so for them, thereshold of $50k will apply. Please note FBAR and FATCA are two different requirements.
      4. If you have $2 interest income on $50 in your resident bank savings account, you are required to report that $2 in your tax return to IRS; even if you have only one account where highest balance is only $50, way below FBAR and FATCA limit. Thanks.

  73. David Sai says:

    Mr.Jigar Patel

    1. Is it possible for you to clarify about closed accounts reporting to IRS in a give year ? Is this limited to accounts more which had more than 50,000 dollars during the year of closure ? Is it limited to the accounts closed in year 2014 only ?

    2. After year 2014 June existing accounts reporting to IRS, when does the years reporting happen every year ?

    Thanks in advance.

    David Sai

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. The reporting requirement is $50,000. So I don’t think any account having less than $5000 that was closed would be reported for US account holders. For other countries, there is no such threshold. Account closed in 2014 or later will be reported if it meets the criteria of reporting.
      2. The reporting is for the calendar year. So amount as of Dec. 31 of every year will be reported. Originally, the effective date was Dec 31, 2013 but it was extended by 6 months as all contries had not signed the FATCA agreement. Thanks.

  74. Nitin Joshi says:

    Hi Jigar,

    Some of the recent posts are indicating that NRIs have been receiving FATCA notices from indian banks, as I did couple of months ago. I have few friends however, holding resident accounts with indian banks that don’t have any US indicia, no US addresses or phone numbers. They have not received any fatca communication from banks. Apparently there is no way for the banks to find out their country of residence and their accounts will not be reported ! As long as they don’t have to furnish their SSN, they are shielded I guess. So in a way, all those who opened NRE/NRO accounts are vulnerable to audit, right ?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      FATCA/CRS is now part of the KYC – Know Your Customer requirement. It is just a time when they too start receiving FATCA/CRS notices. Banks are going step by step. First communicate obvious i.e. holders of NRO/NRE and then contact others. By end of 2016, they would have received the notices. It means, they have little more time to clear their accounts/affairs. Thanks.

  75. David Sai says:

    Mr.Jigar Patel

    Just one issue if you can clarify.

    If someone files their FBAR well before deadline ( June 30 ), and then they realise that they have made a mistake and need to include/change, do they have to file amended FBAR for the same year again or since the deadline is not past can they file original FBAR ?

    or in other terms can FBAR for a given year be filed multiple times before the deadline i.e. June 30th or do they have to file an amendment each time they modify the FBAR before the deadline ?

    Once the deadline is past for a given year, they anyway an amendment needs to be filed, but the above questions is about filing the FBAR again for the same year before the deadline date.

    Rgds
    David

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would think it would still be considered as amended form as you have already file the original. Please check with your CPA. Thanks.

  76. David Sai says:

    Mr.Jigar Patel

    Thanks a bunch for posting the above information. It really helps.

    Now as per the ‘Rule 114H: Due diligence requirement: ‘ you have posted the threshold for lower value account is US $ 50,000 – US $ 1,000,000.

    1. What is the position of those account holders who hold/held accounts with less than 50,000 dollars ?

    2. From what is being heard, certain banks in India have sent letters to their customers who hold more than 50,000 dollars in their accounts, and have asked them to sign FATCA documentation. It is not clear whether it includes only NRIs or American citizens who are residents of India or all of them. Any idea ?

    3. How is RBI, banks identifying NRIs or American citizens who are residents of India ? What is the criteria ?

    4. There are umpteen number of NRIs or American citizens who have dormant accounts, accounts with minimum balance, joint account with parents and siblings where the money does not belong to them, does the IRS understand this scenario ? Some of these accounts might have been opened decades back.

    5. What happens if someone as declared most of the their foreign financial assets and could not declare just a miniscule part because of lack of clarity about the ownership of the funds or have totally forgotten about an accound opened may be 20 years back and lying unused or being used by kith or kin ?

    Please give your opinion on the above.

    Rgds
    David Sai

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Not required to be reported to IRS.
      2. FATCA/CRS is now part of the KYC (Know Your Customer) compliance and will apply to ALL account holders – NRIs – US residents or other countries as well as Residents.
      3. The objective is not to find Indian residents but find persons who can be residents of country other than India.
      4. It is a good time for NRIs to regularize and streamline their accounts and investments. If you are owner, you need to report. A lot of time parents transfer funds to children for tax planning as per Indian laws but it is time that they also consider Indian laws as well as laws of country where their children resides.
      5. Currently, all bank accounts are required to be reported in the tax return in India. Any account not reported may be considered as undisclosed/(black money) account. I would recommend getting the ownership information of all accounts of the family and evaluate whether you want to be a joint holder. If not, it is advisable to remove your name as jointholder and become a nominee. As per Indian Income tax, first holder is considere the owner of the account and is taxed as such on the income. So if you are the second or third holder just as a convenience, it is better to remove your name and just be a nominee on the account. I would also recommend to ask your parents to have a WILL. Thanks.

  77. Gary says:

    First of all, thank you so much for your time to post and guidance on a such broad and complex topic, hats off Jigar.
    Here is my situation and would appreciate your guidance and next action.
    Few questions:
    1) I am in USA since 1999 and became citizen in 2007 and maintaining an NRE account but haven’t reported that accounts on any of my return (unknowingly).
    2) I am maintaining approx 75 K USD in my account.
    3) Received the mail regarding FATCA declaration.
    Questions:
    4) What are the implications here, reading earlier post it seems like balance starting June 14 till date will be reported.
    5) In the case of past taxes and penalty, will that only be on interest earning only.
    5) What best course action for me would you suggest. I have stayed clean and want to stay clean and don’t want any legal trouble of any kind.
    6) Any referral for any CPA in USA ?
    7) Is there any way to speak over the phone ?

    Thank you again for guidance.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I would recommend you to clean up the prior filing and pay tax/interest/penalty by going through the Streamlined Compliance Program. Please contact us via email or phone for any consultation for the same. Thanks.

  78. Krunal says:

    Hi Mr. Patel
    Thanks a lot for sharing such a fantastic information.
    I have few questions and appreciate your help and advise on this.

    Our’s is a depository financial institution and having most of the local client base. We are not a deemed compliant FFI as we also solicit non resident clients and accepts deposits from NRI.

    As per the FATCA Rule It is mandatory to obtain self declaration from each client (Local + NRI) for all new accounts opened from 01.07.2014 onwards.

    My question is
    1) Do we have to obtain self declaration from all clients (Local + NRI) ?
    2) Even customers from Rural area also need to provide FATCA self declaration form?
    3) Is it sufficient if we accept self declaration while opening NRI/NRE/FCRN accounts only and no requirement while opening current/saving local account?

    Please guide.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes, I would think so as a lot of NRIs may be holding accounts as resident. However, you would need to follow the KYC rules as required by the depositories.
      2. Yes. I think FATCA/CRS is now part of the KYC for account opening.
      3. No.
      Thanks.

  79. AA says:

    Hi,
    I am living in Netherlands for couple of years and have following questions regarding MCAA

    1. I hold NRO account wherein TDS is directly deducted by bank. Every year I file income tax return in India and most of the TDS I receive back from income tax department as my total earning in India is less than Rs. 2 lac. Will I be taxed on the interest earned in this account in Netherlands?
    2. I hold NRE account, wherein no tax is deducted in India. I have not declared the interest earned in this account in Netherlands, as I was not aware of it. Will Indian government be sharing the financial detail only from 2017? In this case I believe information about interest earn till 2016 will not be shared. Please let me know your thoughts and recommendation for this situation
    3. Will Indian Government be sharing the detail related to other assets like immovable property, shares etc.
    4. What are the investment options in India to avoid this taxation?
    4. I am resident tax payer in Netherlands and have some saving in bank account here. Also planning to buy a house here. Is there anything I need to declare while filling income tax in India?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Please check with local tax accountant. I would think for developed countries, global income is taxable and as a result, you may be required to report your Indian income and pay tax.
      2. The reporting will start from balance as on Dec 31, 2015 and from 2016. India will have 2 years to start reporting.
      3. Financial assets only. No to immovable properties. Yes to shares.
      4. While you may not avoid taxation, there are certain investments, which can be tax efficient as well as can give benefit of rupee depreciation. Please contact us for the same.
      5. As you are an NRI, you are not required to report your foreign assets. Thanks.

  80. Archita says:

    Hi Jigar

    The information is the best information available on net. Thanks a ton. I really appreciate if you can shed some light on the issues i have :

    1) From Nov 2011 till Aug 2015 i have send about 180 thousand pounds to my NRI account in India. Out of this money I have gifted about 60 thousand pounds to my parents in India. Rest (120K pounds) is in my NRI account which has grown to about 160 thousand pounds through FD’s over the last 5 years -In the worst scenario if i am reported do i need to pay UK tax on the 40K pound i have received as interest ?

    2) I have send the money at an average exchange rate of Rs 84 per pound (Total in Pounds is about 218K). If i repatriate the money back from the NRI account at the current rate of Rs 94 per pound i will get about 231K. Will i have to pay tax for the 13K pounds extra i am bringing back to UK or will i have to pay tax on the 40K pound i have received as interest over the last 5 years. Do i get any tax relief for the money i have lost due to appreciation of pound.

    Thanks in Advence
    Archita

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Had you properly reported your income, you would have paid tax on 40k pounds. However, as you have not properly reported your income, you would need to pay interest as well as penalty.
      2. I don’t think so. The benefit is available only in capital gain as it is calculated in GBP only. Whereas interest is converted to GBP. Please check my blog on the subject at http://nareshco.com/blog/?p=1352. Thanks.

  81. Saurabh says:

    Hi,

    I have a question on reporting accounts in FBAR form. I have multiple Fix Deposits account in one bank, all those FDs are tied to a CIF No….Should I report those FDs only once with the CIF No.? In that case, what should I fill as the Maximum amount? Should it be sum of max amount of each FD OR max amount among all FDs?

    Thank you.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      The reporting would be based on a unique ID. You may report your balance by customer code (CIF) combining all your account – NRO/NRE/FDs or report them separately by all accounts. Accordingly, you would report the highest balance, either combined or individually. Thanks.

      • Saurabh says:

        Thanks so much for your response. If I report those accounts individually, count will be more than 25 and then I have to limit myself reporting 25 account and check the option which says check this box if you have more than 25 accounts.

        My question is, can it trigger any audit if I didn’t declare all accounts even due to the limitation of 25 accounts.

        • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

          1. It is okay if you have more than 25 accounts. You would not just tick and submit but keep all information with you.
          2. No comment on the triggering an audit. One of my client has more than 25 accounts and has been filing as such since last 3 years and no audit yet. It would depend on case by case basis. Thanks.

  82. manoj says:

    Hello..first of all thanks for providing so much Information here..

    i have been in US for about 3 yrs (2012-2015) and during this period transferred Money ro my NRE and NRO accounts in India..at the end of 2015 i moved to a different Country and so still maintainign my NRI Status..i have filed all my taxes in US…(not yet done for financial yesar 2015)
    i do recieved interest on the Money in my nre/nro accounts and the bank already deducts the tds on that..i do have ppf acounts in india which i am still maintinain..recently i recieved a notification regarding updation of FACTA/CRS documents.. since i am not in USA and a different Country now, what am i supposed to do exactly?
    thansk in advance for the reply..

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Please provide the information of your country you are currently resident of and submit the details. Please note FATCA threshold (USA) is $50,000. For other countries, all your money even $1 will be reported to your country of residence under CRS (Common Reporting Standards). Thanks.

  83. Sunil says:

    Hi I am an NRI. Was working in singapore till feb16 and was using an account with ICICI that was opened in Aug15.
    Was told that as I am in Singapore I dont have to fill FATCA.

    I moved to USA on H1 in mar16 and only updated the contact number to US number from singapore number.

    Got an email from ICICI to fill FATCA form by 30-apr-16, else non compliance will be reported to CBDT.

    Balance is around 120000USD. why is ICICI so desperate to seek information from me as I am a singapore resident as of 31dec15

    Can I avoid reporting by getting balance below 50K USD?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. It won’t help. Your account is flagged as a resident of USA. Your balance will be reported. However, as you are a US resident only from 2016, you do not have any tax liability for earlier years.
      2. If you need money in USA, please remit to USA. Else, how would you plan to reduce your balance below $50000? Anyway, if you need any guidance for investment that optimized Indian and US tax laws and reduce your tax bill, please contact us. Thanks.

  84. VC says:

    Dear Mr Patel,

    I am a resident of the Netherlands. I have a NRE account with a few FDRs and one NRO account with linked FDR.
    Will all the accounts be reported? Even NRO account? TDS does get deducted from the interest payments in NRO and NRO linked FDRs

    Thanks.

    Regards

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Yes, ALL accounts will be reported to Income Tax department and then to Netherlands. Thanks.

    • AD says:

      Hi VC,

      I have also quite similar situation. Did you manage to get some additional info? Can we speak with each other?

      Thx

  85. Nitin Joshi says:

    Thanks for this fantastic information !

    A few questions –
    1) When does the actual reporting begin ? Have they already reported data for 2014 ?
    2) What would be the typical cycle or month ? Every year, say July or any particular month, for the previous FY ?
    3) Do they report all “resident” accounts also ? Even if the due diligence or KYC has not been completed yet ?

    My case – I moved to India for good in Apr 2013. Later I came back to US in 2015. I have not been filing fbars earlier.

    1) I think I might have to file fbar and fatca for 2015. I have already filed returns. So will have to amend I guess. Hence wondering how much time I have ?
    2) I might have to file fbars for 2012 and earlier
    2) Not very clear about 2013 , How it should be handled ?

    Thanks again !

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I would think the reporting will begin by end of 2016 or in 2017. However reporting will include June 2014, Dec 2014 and may be Dec 2015 data.
      2. Annual reporting for calendar year – Dec 31
      3. I would think so as KYC procedures have been updated with requirement of FATCA/CRS declaration. Banks would contact all of their account holders to comply with updated KYC requirements.
      For your case:
      1. FATCA form 8938 to be filed with your 10400. Also, FBAR deadline has been revised and tied to the tax return so you are also required to file all the forms by April 15. That being said, you may apply for an extension for your tax return and would get extension for your FATCA and FBAR as well.
      2. Yes, but you may make some risk as Indian government will report data only from June 2014. However, if you are a greencard holder or US citizen, I would suggest to contact a CPA and consider one of the voluntary disclosure schemes and coming out clean.
      3. see #2. Thanks.

  86. Bhaskar says:

    I have two NRE accounts in India.. Both are opened in 2013. The combined account balance of both would be less than $50K. Will my accoutn be reported to US? I have not provided PAN card information as this is a NRE account.
    One of the bank is asking for my TIN information (as they are asking from all the customers). Any problem in giving this information?

    Also how would the account be valued to determine $50k or not, is the conversion rate used is the USD to INR as on Dec 31st 2015?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I don’t think so as the CBDT (IT depatment) has instructed banks to report only account information of $50000+ for US residents and any amount for residents from any other country. However, if IRS asks, they may provide but less likely. Thanks.

  87. Sanjeet says:

    Thank you Jigar, this is the only blog that explains and educates everything that is important to NRIs in USA.
    Few questions:
    1) I am in USA since 2007 and haven’t reported any of my Indian accounts. How do I proceed about this? What should be my next step?
    2) Can I take Indian CPA’s service?
    3) What would be the impact on tax returns that I filed from 2007 to 2015?
    4) Once I comply on everything else, does it mean I can transfer my Indian accounts money to USA? If I would like to do that what would be right procedure?

    Thank you again for guidance.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I would suggest you to consider Streamlined Compliance. Contact an experience CPA in USA.
      2. I would not recommend.
      3. As per streamlined, you would revise your 3 years of return and file FBAR for 6 years. Contact your CPA for guidance.
      4. There is no restrictions on transfer of funds. You can still transfer funds to USA. For that, you would need CA certificate in for, 15CB and submit form 15CA to the IT department. Thanks.

    • J says:

      Sanjeet, Did you approached anyone? What did you do for the current year?
      please let me know the steps you approached.

  88. C Mistry says:

    Hello Sir
    I am green card holder since 7 years and I have three savings account in India.
    My sister gifted approx 40 lakhs of amount via online transfer to these savings accounts and around 4/5 lakhs of cash deposit when I visited India in 2015. Now I come to know that I can not keep savings account in India and need to transfer money to NRO account and close these savings account as soon as possible.I am going to do it immediately.Can I show this receivables of 2015 when I file my IT return in March 2016 in US.Because technically my NRO account I am going to open in February and will show entry of funds transfer from savings account in February 2016. Shall I report this income in next year ? I can read from your blog that gift received is not taxable in US but still I had to show this amount , is it correct ?
    I will appreciate if you can guide me in this confusion.

    Thanks

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      NRO account is just a requirement that helps RBI track accounts and investments by NRIs. When you tell your bank that you are now an NRI, your account is re-designated as NRO. You may have the same customer ID, same account number and may also continue to use same cheque book. Also, there is no transfer of funds. However, some banks may require new account, new account number and transfer as per their internal procedures but it is not a requirement. That being said, I don’t think having a resident or NRO account should affect your compliance requirement. Thanks.

  89. Korak says:

    Dear Sir,
    Thanks a lot for throwing light on this extremely important issue, especially for professionals who park their hard earned money in India but may be caught being with the wrong side of law. I have one question:
    1) I left USA after 2014, had 3 nre account all with balance less than 50k in 2014. All 3 have been reported in Fbar and income taxed in USA. I had few mutual funds stocks and few bank accounts as resident which accounts and income not disclosed in USA. Will the Nre account be reported even if balance less than 50k. Can the resident account be linked and all reported by RBI since all have same PAN.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I would think so. The banks would do a through check or request all their account holders to update their KYC and submit FATCA/CRS declaration and accordingly update their records and report. If you are not a greencard holder or citizen and has left USA after 2014, you may not have to worry a lot. Thanks.

  90. John Appleseed says:

    Does IRS share with Indian authorities the information provided by a US tax resident but Indian citizen on the annual IRS returns form?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      If they don’t, they will soon share. However, the key would be linking your SSN with your PAN. Thanks.

  91. Sahar Sharma says:

    Does the table above in your blog post mean that accounts held by NRIs and Indian citizens in the US with a value of less than USD 50,000 are not being reported to the Indian government?

  92. Sahar Sharma says:

    I had another question as well.

    What information does IRS share with Indian government for Indian citizens filing returns in the US? IRS forms ask for country of citizenship. Should one assume that all information including income declared, tax amount, etc. gets reported to Government of India/Indian tax department?

    Thank you very much.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      I don’t think there is blanket sharing of data. It may be in future. However, for a meaningful sharing, your SSN and PAN needs to be linked. Thanks.

  93. Sahar Sharma says:

    I lived in the US as a F-1 student for 8 years and had a stipend received from the University for the first 6. Since IRS rules made me a US Tax Resident after 5 years, in year 6 and 7 I filled the relevant 8938 form as well as declared every single financial asset owned in India,either as first holder or as second holder with parents or spouse, calculated Indian income in my IRS forms and submitted full information in FBAR.

    In 2015 (year 8), I left the US on August 1. I do not have any income now exempt for some dividend and bank interest income. For tax year 2015, I will file form 1040 and declare all sources of US Income. The address on my IRS form will be my non-US address since I no longer have a US address. From 2016 onwards, I will not have to fill any tax return in the US since my US Income will be below reportable level. My question is: since I left the US on August 1, do I have to fill up 8938 and FBAR as well?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Only if you qualify as “US resident” based on the residency definition, which I think you would. Please check with your CPA. Thanks.

  94. Amit says:

    Dear Jigar,

    We moved to USA in sept 2014 and fill the IT for 2015 in coming month.

    1) I understand from your blog that all assets like FD, recurring deposit, Bank balance, Shares, MF, LIC policy, NSC/KVP, Property is to be mention to IRS. Please confirm.
    2) Please advise whether precious metals, paintings and expensive watches to be informed to IRS
    3) Please advise whether income generated from Dividend from MF, Tax free Government bonds etc is taxable in USA as they were purchased in indian rupees few years back and tax free in India ?
    4) Also NRE FD is taxable in USA as the same is exempt in India ?

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes. All foreign financial accounts in FBAR (Fincen 114) and foreign financial assets in Form 8938 (FATCA). The threshold for both forms are different.
      2. No.
      3. Yes, they will be taxable.
      4. Yes. Thanks.

  95. Shirish says:

    I am NRI and hold Mutual funds in India jointly with my wife, who is resident. Is FATCA/CRS declaration required by joint holder(wife) also? I tried to do it online, but I could do it only for myself (first holder), but could not do it online for my wife (second holder). My wife does not own MF where she is the first holder. Please advise.
    Regards,

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      Yes. Both holders need to make FATCA/CRS declaration. Thanks.

  96. Dinesh Patel says:

    Hi,
    Thanks for the informative blog. I have few questions and appreciate your help and advice on this.

    I have a couple of NRE accounts in India in 2 separate banks – one in Rupee and other in USD.
    The USD account balance in 2014 was > $10K but less than $15K. The Re account balance was >$100K in 2014 (multiple fixed deposits-same bank) but less than $50K in 2015.
    1. Will the above 2 accounts be reported?
    2. Regarding the rupee account, will it still be reported if the due diligence not completed yet and scheduled to complete by June 2016 (now that the balance is <$50K in 2015)
    3. What are my options to fix this as both these are not reported.

    Thank you in advance for your advise.
    Dinesh.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes, I would think so as the bank would have a unique customer ID and all accounts will be linked.
      2. The due diligence would be performed for balance as on June 30, 2014 so evenif it is completed after, it would not matter.
      3. Voluntarily disclose your accounts and income to IRS. Technically, as an NRI, you are not allowed to have a resident account. You may want continue lying but I do not recommend. You may also close your account and pray IRS won’t find out, but I do not recomment. You may also start reporting from current year, but IRS considers this as “quiet disclosure” and is not recommended also. There may be other options based on your situation/circumstances but I would not recommend them too. Thanks.

  97. LSK says:

    Hi,

    I will be traveling to USA with my wife and child on H1B visa on 1st April.
    My spouse works as a software engineer in India and will not be working here as she will be on H4. The USA financial year is Jan – Dec while for India its Apr – Mar. I will be working there for almost 1 year – till Mar 17
    While filing the returns next year in USA for 2016-2017 : Should I declare my income of India this year Jan – Mar 2016 as well ? What is the process to show that income and are any tax credits available for the same ?
    Regarding my spouse’s income do I need to show it as well (Jan – Mar 2016) ?

    Thanks.

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. Yes. However, you may not be taxed twice due to Double Tax Avoidance Agreement between India and USA and would be able to claim the credit for tax paid in India.
      2. There is a foreign tax credit form to calculate the amount of tax credit.
      3. If would depend whether you would file the tax return as married filing jointly or separately. If jointly, your wife’s income would also needs to be included. I would suggest you contact experience CPA for your first year of reporting and compliance. Thanks.

  98. Worried NRI says:

    Hello Sir,
    Thanks for the very informative blog. We have few questions and appreciate your help.

    1. Will the account be deemed US Reportable Account, if the balance is above >$50K during 2014 but less than $50K on 31 Dec, 2015.
    2. Will they still report if due diligence is not completed on this Low value account?
    3. If they complete the due diligence by June 30, 2016, will they still report for 2014 or they would not report the account as balance at end of 2015 was less than treshold.

    Thank you in advance for your advice.
    Worried

    • Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India) says:

      1. I think it will be covered.
      2. Without due diligence, the bank would not know that an account is a US reportable account. The reporting will be after completion of due diligence.
      3. The effective date of FATCA is July 1, 2014 so when India would report in 2016 or 2017, the reporting would be from June 30, 2014. Thanks.

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