FATCA & CRS: who learns about your Indian investments
FATCA and CRS are information-exchange regimes, not taxes. Neither adds a rupee to your bill — they decide which tax authorities automatically learn about your Indian accounts and folios. For an NRI investor they show up as one document: the FATCA/CRS self-certification every bank and AMC collects at onboarding, and without which a folio can't transact at all.
The two regimes, side by side
| Aspect | FATCA | CRS |
|---|---|---|
| What it is | A US law (2010). India implements it through a Model 1 inter-governmental agreement signed in 2015. | The OECD's Common Reporting Standard — the multilateral version, adopted by 100+ jurisdictions. |
| Who it covers | US persons: US citizens, green-card holders, and US tax residents — wherever in the world they hold accounts. | Tax residents of any participating country — the UAE, Singapore, UK, Canada, Australia and most others. The US itself is not in CRS; FATCA runs separately. |
| Where data goes | Your bank/AMC → CBDT (Form 61B) → the US IRS, which cross-checks it against your US returns. | Your bank/AMC → CBDT (Form 61B) → the tax authority of your country of residence. |
| India's legal basis | Section 285BA with Rules 114F–114H of the Income-tax Rules (definitions, reporting, due diligence) — the same framework serves both regimes. | Same — Section 285BA, Rules 114F–114H, Form 61B reporting by financial institutions. |
The self-certification: one form, real consequences
At KYC/onboarding, every bank, AMC and depository participant collects a FATCA/CRS self-certification: your countries of tax residence, the TIN for each, place of birth, and (where relevant) US-person status. The institution uses it to classify your account as reportable or not under Rule 114H due diligence, and reports reportable accounts annually on Form 61B.
Two practical points. First, it's a gate, not a formality: an incomplete or missing certification means the AMC blocks the folio — both purchases and redemptions — until it's remediated. Second, the declaration carries a standing obligation to report changes within 30 days — a new country of residence, a new TIN, a change in US-person status.
If you're a US person
FATCA means the IRS sees your Indian folios, so your US return must already tell the same story — gaps between what India reports and what you filed are what trigger IRS follow-up. Separately, US tax rules may treat Indian mutual funds as PFICs (Passive Foreign Investment Companies), which carries its own punitive tax treatment and specialised reporting (Form 8621) on the US side — a US-tax-professional question before investing, not after. Partly for these reasons, AMC acceptance of US and Canada residents varies: some fund houses onboard them with additional declarations, others don't accept them at all. Scheme-by-scheme eligibility is something the NRI desk can confirm before you start paperwork.
Illustrative only · Not tax or legal advice. Reporting rules and institutional practices change; US tax treatment of Indian investments is a question for a US-qualified professional. Consult a qualified adviser for your situation.