April 17, 2017 -
India’s tax department announced that all individuals who opened a bank account from July 2014 to August 2015 will have to submit know your customer (KYC) details and their Aadhaar number to banks and financial institutions by the end of the month, according to a report by The Times of India.
Aadhaar is the 12-digit unique identification number issued by the Indian government to every individual resident of India. The Aadhaar project aims to provide a single, unique identifier which captures all the demographic and biometric details of every Indian resident. At last count, over 1.1 billion people out of India’s population of 1.27 billion have been registered in the Aadhaar database.
Individuals will then be prompted to self-certify their credentials to comply with Foreign Tax Compliance Act (FATCA) regulations.
In the event that the bank customers are unable to provide the required information and provide self-certification by April 30, banks and financial institutions will be allowed to block their accounts..
Once they provide the necessary details the banking customers will be able to operate the accounts.
The provision is a part of FATCA, a tax information sharing agreement signed by India and the U.S. in July 2015 that is aimed at strengthening their efforts for automatic exchange of financial information to combat tax evaders..
“The account holders may be informed that, in case self-certifications are not provided till April 30, 2017, the accounts would be blocked, which would mean that the financial institution would prohibit the account holder from effecting any transaction with respect to such accounts,” the tax department said in a statement.
India’s tax officials said that the provision applies to account holders at banks, insurance and stocks.
Last week, the Indian government stated that it will not link its Aadhaar biometric identification scheme with its national intelligence databases.