Rule 239 — Information to be maintained and reported. Made under s.508 of the Income-tax Act, 2025.
Rule 239 gives effect to Section 508 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Sub-rule (1) lists what a reporting financial institution must maintain and report for each reportable account. For an individual account holder who is a reportable person: name, address, taxpayer identification number assigned by the country or territory of residence for tax purposes, and date and place of birth. For an entity account holder identified under the due diligence in rule 240 as having one or more controlling persons who are reportable persons: the entity's name, address and taxpayer identification number, and for each such controlling person the name, address, date and place of birth and taxpayer identification number. In each case, for an account other than a U.S. Reportable account, the institution must also maintain and report whether a valid self-certification has been provided, report whether the account is a joint account including the number of joint holders, and for an entity record the roles by virtue of which each reportable person is a controlling person.
The remaining clauses cover the account itself: the account number or its functional equivalent, and for a non-U.S. Reportable account also the type of account and whether it is pre-existing or new; the account balance or value at the end of the relevant calendar year, including the cash value or surrender value of a cash value insurance contract or annuity contract, or the value immediately before closure if the account was closed during the year; for a custodial account, the total gross interest, dividends and other income paid or credited during the calendar year and the total gross proceeds from sale or redemption of financial assets where the institution acted as custodian, broker, nominee or agent; for a depository account, the total gross interest paid or credited during the year; for any other account, the total gross amount paid or credited to the account holder during the year where the institution is the obligor or debtor, including the aggregate of redemption payments; and for calendar years 2015 and 2016, the name of each non-participating financial institution to which payments were made and the aggregate amount of those payments. Clause (i) adds, for a non-U.S. Reportable account, the roles by virtue of which a reportable person holds an equity interest in an investment entity that is a legal arrangement.
Sub-rule (1) then phases the obligation by year: for calendar year 2014, clauses (a) to (d) for U.S. Reportable accounts; for 2015, clauses (a) to (d), (f), (g), (h) and sub-clause (i) of clause (e) for U.S. Reportable accounts; for 2016, clauses (a) to (h) for all reportable accounts; and for 2017 and subsequent years, clauses (a) to (g) for all reportable accounts. A taxpayer identification number need not be reported for a U.S. Reportable account maintained as on the 30th June, 2014 if it is not in the institution's records.
Sub-rule (2) defines "account holder" as the person listed or identified as the holder by the institution maintaining the account, with two provisos: a person other than a financial institution holding an account for another as agent, custodian, nominee, signatory, investment advisor or intermediary is not treated as holding it, and the other person is; and for a cash value insurance or annuity contract the account holder is any person entitled to receive payment on maturity, or entitled to access the cash value or change the beneficiary, or, where no one can do either, the person named as owner and any person with a vested entitlement to payment. It defines "taxpayer identification number" as the number assigned in the country or territory of tax residence, including a functional equivalent where none is assigned.
Sub-rule (3) requires a taxpayer identification number to be maintained for each country or territory where the person is resident in more than one. Sub-rule (4) relieves reporting of a taxpayer identification number or date of birth for a pre-existing account where it is not in the records, but requires the institution to obtain them for pre-existing accounts by the 31st December, 2016 and report them for 2017 onwards, and for a non-U.S. Reportable account whenever it updates the pre-existing account information under the rules made under the Prevention of Money-Laundering Act, 2002. Sub-rule (5) removes the taxpayer identification number requirement where the relevant country or territory does not issue one or its domestic law does not require its collection. Sub-rule (6) requires the place of birth to be reported only if it is available in electronically searchable data. Sub-rule (7) removes gross proceeds reporting under clause (e)(ii) to the extent those proceeds are reported under the Crypto-Asset Reporting Framework, and applies only to accounts other than U.S. Reportable accounts, unless the institution elects otherwise for a clearly identified group of accounts.
Sub-rules (8) and (9) govern the statement itself. The statement of reportable account under section 508(1)(k) is furnished for each account identified as reportable under the rule 240 due diligence, and where no account is so identified a nil statement must be furnished. It is furnished in Form No. 166, in the manner specified by the Principal Director General or Director General of Income Tax (Systems) with the Board's approval, for every calendar year by the 31st day of May following that year.
Sub-rule (10) requires the statement to go to the Director or Joint Director of Income-tax (Intelligence and Criminal Investigation) by online transmission of electronic data to a designated server under digital signature, in the data structure specified, and leaves the procedures, data structures, standards and security, archival and retrieval policies to the Principal Director General of Income-tax (Systems).
Sub-rule (11) requires every reporting financial institution to communicate the name, designation and communication details of its Designated Director and Principal Officer and obtain a registration number; requires the statement to be signed, verified and furnished by the Designated Director, or by a holder of a valid power of attorney from him where the institution is a non-resident; and makes it the duty of the institution, its Designated Director, Principal Officer and employees to observe the procedure and manner of maintaining information specified by its regulator. It defines Designated Director by entity type, Principal Officer as an officer designated by the institution, and regulator as the person, authority or Government vested with power to licence, authorise, register, regulate or supervise the institution.
Sub-rule (12) requires the regulator to issue instructions or guidelines incorporating the reporting and due diligence requirements of rules 238 to 240, providing the procedure and manner of maintaining the information, and ensuring the information in sub-rule (1) is available with the institution; and requires every institution to maintain information accordingly.
Sub-rule (13) is transitional: for a reportable account other than a U.S. Reportable account maintained as of the 31st December, 2025, and for reporting periods ending by the second calendar year following that date, the role by virtue of which a reportable person is a controlling person or equity interest holder need be reported only if it is available in electronically searchable data.
Section 508(1)(k) requires a statement of reportable accounts but cannot itself specify what a bank, custodian, insurer or investment entity must hold on file about a foreign-resident customer. The rule is that specification, and it is written to match the international exchange frameworks India reports under — which is why the obligations are phased by calendar year, why U.S. Reportable accounts are treated separately throughout, and why several requirements are softened to what is available in electronically searchable data rather than demanding a manual file review.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Due date for the statement of reportable account | The 31st day of May following the calendar year | For every calendar year, in Form No. 166 | Sub-rule (9) |
| Information required for calendar year 2014 | Clauses (a), (b), (c) and (d) | With regard to U.S. Reportable accounts only | Sub-rule (1), proviso (i) |
| Information required for calendar year 2015 | Clauses (a), (b), (c), (d), (f), (g), (h) and sub-clause (i) of clause (e) | With regard to U.S. Reportable accounts only | Sub-rule (1), proviso (ii) |
| Information required for calendar year 2016 | Clauses (a) to (h) | With regard to all reportable accounts | Sub-rule (1), proviso (iii) |
| Information required for calendar year 2017 and subsequent years | Clauses (a) to (g) | With regard to all reportable accounts | Sub-rule (1), proviso (iv) |
| Relief from reporting a taxpayer identification number for older U.S. Reportable accounts | Accounts maintained as on the 30th June, 2014 | Only where the taxpayer identification number is not in the records of the reporting financial institution | Sub-rule (1), proviso (v) |
| Non-participating financial institution payment reporting | Calendar years 2015 and 2016 | Name of each non-participating financial institution to which payments have been made and the aggregate amount of such payments | Sub-rule (1)(h) |
| Date by which taxpayer identification number and date of birth must be obtained for pre-existing accounts | The 31st December, 2016 | Reported with respect to calendar year 2017 and subsequent years | Sub-rule (4)(a) |
| Transitional relief on reporting controlling person and equity interest roles | Accounts maintained as of the 31st December, 2025, for reporting periods ending by the second calendar year following that date | Applies to accounts other than U.S. Reportable accounts; the role is reported only if available in electronically searchable data | Sub-rule (13) |
Two divisions run through the whole rule and every question turns on them: whether the account is a U.S. Reportable account or not, and which calendar year is being reported. The additional items — the self-certification flag, the joint account flag and count, the account type and pre-existing or new status, and the controlling person or equity interest roles — are required only for accounts other than U.S. Reportable accounts. A nil return is not an absence of a return: sub-rule (8) requires a nil statement where the rule 240 due diligence identifies no reportable account, so an institution with no foreign-resident customers still files. Several reliefs are framed by what the institution's systems hold, not by what it could discover — place of birth under sub-rule (6) and, transitionally, the controlling person roles under sub-rule (13), are reported only where available in electronically searchable data — but the taxpayer identification number relief in sub-rule (4) is temporary in a different way, because it comes with a positive duty to obtain the number and date of birth. Note who signs: the Designated Director, whose identity and contact details must already have been communicated under sub-rule (11)(a) and a registration number obtained, and only a holder of a valid power of attorney from him may sign for a non-resident institution. The rule also reaches beyond the institution — sub-rule (12) obliges the regulator to issue instructions ensuring the sub-rule (1) information is available with the institution in the first place.
A bank identifies, under the rule 240 due diligence, one reportable account other than a U.S. Reportable account: a joint deposit account held by two individuals resident for tax purposes in a country outside India. For that calendar year it reports each holder's name, address, taxpayer identification number and date and place of birth, whether a valid self-certification was provided, that the account is joint and that there are two holders, the account number, the type of account and that it is a pre-existing account, the year-end balance, and the total gross interest credited during the year. Place of birth is reported because it sits in the bank's electronically searchable data; had it not, sub-rule (6) would not require it. Form No. 166 goes in by 31st May of the following year, signed and verified by the Designated Director. In the next year the same due diligence identifies no reportable account at all, and the bank files a nil statement under sub-rule (8) rather than nothing.
A customer meets it as the self-certification and the tax residence and taxpayer identification number questions asked at account opening, and again when a bank asks an existing customer to update those details. A financial institution meets it as the annual Form No. 166 filing, the registration of its Designated Director, and the systems work its regulator's instructions require.
The statement of reportable account required to be furnished under section 508(1)(k) shall be furnished by a reporting financial institution in respect of each account which has been identified, pursuant to due diligence procedure specified in rule 240, as a reportable account
a nil statement shall be furnished by the reporting financial institution
the place of birth is not required to be reported unless it is available in the electronically searchable data maintained by the reporting financial institution