A guidance note issued by the Central Board of Direct Taxes, dated 30 November 2016. Issued under section 285BA.
A long guidance note of the Foreign Tax and Tax Research Division of the Central Board of Direct Taxes, running to well over a hundred and eighty pages with appendices. It explains the due diligence and reporting obligations that rules 114F to 114H and Form 61B of the Income-tax Rules, 1962 place on financial institutions, those rules having been made under section 285BA as amended by the Finance (No. 2) Act, 2014. This is the version updated as on 30 November 2016.
This is a guidance note — the Board's own working manual on a subject, usually long, usually written for the people who have to operate a reporting regime. It explains; it does not enact.
The note works through the reporting machinery in sequence. It identifies who is a reporting financial institution and what a financial account is, separates pre-existing accounts from new accounts, and sets out the due diligence a reporting financial institution must apply to each in order to identify a reportable account. It explains self-certification, the treatment of entity accounts and the look-through to controlling persons, and the mechanics of reporting in Form 61B. It fixes the cut-off dates that divide pre-existing from new accounts: 30 June 2014 for FATCA and 31 December 2015 for the common reporting standard. It gives 31 May 2017 as the first reporting deadline under the common reporting standard. It is written for financial institutions, regulators and the department's own officers alike.
India took on obligations under the inter-governmental agreement with the United States and under the common reporting standard for automatic exchange of information. Those obligations were brought into domestic law through section 285BA and rules 114F to 114H, which are dense and use terms drawn from international instruments rather than from the Income-tax Act. Banks, depositories, insurers and fund houses had to build identification and reporting systems against that text. The guidance note was issued so that the industry would read the rules the same way the department does.
The note is guidance and not law. Its force runs against the department's own officers, who are expected to apply the rules as the Board has explained them here. A reporting financial institution or an account holder is not bound by it and may argue that rules 114F to 114H mean something else, and no Tribunal or court is obliged to accept the Board's reading. The rules and Form 61B remain the operative text.
Updated as on 30 November 2016 and superseding the earlier versions of the same note. The cut-off dates it works from are 30 June 2014 for FATCA and 31 December 2015 for the common reporting standard; the first common reporting standard filing date it gives is 31 May 2017.
Check the version. This note has been reissued more than once and the paragraph numbering shifts between editions, so cite the date of the edition you are relying on. Where the note and the rule diverge, the rule prevails, and the note cannot cure a defect in Form 61B. The two cut-off dates are different for FATCA and for the common reporting standard, and treating an account as pre-existing under the wrong one changes the whole due diligence path.
This Guidance Note is for providing guidance to the Financial Institutions, Regulators and officers of the Income Tax Department for ensuring compliance with the reporting requirements provided in Rules 114F to 114H and Form 61B of the Income-tax Rules, 1962.
— the Central Board of Direct Taxes, guidance note, 30 November 2016. Read it in the department’s own PDF.
| Under the Income-tax Act, 1961 | Now, in the Income-tax Act, 2025 |
|---|---|
| section 285BA | section 508 |
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What here is the Board’s and what is ours. The document is the Central Board of Direct Taxes’ own. Its date and the words quoted above are reproduced from the Board’s own PDF, which is here. Everything else on this page is ours: the plain-English account of what the document is and what it does, the reading of which provision it turns on, the note on what to watch, and the choice of cases. Where our account and the document part, the document governs.
An order of the Board binds the department, not you and not a court. The Board writes to its own officers. An assessee may hold the department to an order or an instruction that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves. This is the most common mistake made with this material, and it is worth making twice: a direction of the Board is not a section of the Act.
We did not read all of it. The department’s file returned only part of this document to us, so what is written above is written from the part we could read. Open the PDF before you rely on it.
What we could not settle. The document runs to more than 180 pages and the fetch returned the front matter, the statement of purpose, the key dates and the structure of the chapters. The detailed due diligence procedures, the worked examples and the appendices were not read. No F. No. is printed on the note.