r2i forum

Dear Rajesh sir,
"1. Financial Institutions are required to report details of accounts of US citizens or US addressee if :
.01 the balance in the account / customer Id exceeds US$ 50,000 as on 30th June , 2014"

1) Here, my balance amount on 30th June is below $50,000 but it was $60,000 in March 2014. Will that also be reported because it was more than $50,000 in March 2014 or just they wil take the balance on June 30th to be reported?

2) And i have balances in another bank as well. That was $20,000. Will all the accounts be clubbed and reported or this account will not be reported?
Please reply.

Thanks,
Rajani

RAJESH H DHRUVA;589350
1. India and USA have a Double Tax Treaty which is reciprocal .

Where can I read about what's shared by the US IRS to Indian Income Tax authority with regards to this double tax treaty or can you briefly describe what's shared?

RAJESH H DHRUVA;589350
4. As such FATCA is independent Law but India has liberty to create similar domestic law and ensure its signing and implementation by USA and other countries.
5. In absence IRS doesnot provide information of all and sundry

Though India can create one such domestic law and try to force it on other countries, one wonders the leverage India would have. US was able to pull it off as its estimated that over 1/2 of the world money is invested in the US and the steep penalties it enforced. Several countries economies would have been hurt if they decided to not sign the IGA, not just because of the penalties, but because several of their institutions do business with or have counterparts in the US.

Now, if India imposed such a law on the US, it is highly probable that it will looked at as a discrimination by national origin in the US. Even in the reciprocal IGA that has been signed between US and other countries, the treaty only pledges that it will implement reciprocity in the future.

Thanks Rajesh sir for your reply. Do i need to submit FBAR or form 8938 for the previous years? I transferred that amount from US and i have only interest income in India on that amount. I need not pay any tax in USA both for India and US income as the only income in US is my Survivor's social security benefits and in India only interest income on FDs in bank accounts. That was under the tax limit. Do i need to pay Fed tax and penalty for not disclosing the accounts even though i need not pay any tax? And the banks and MF in India have Indian address only not US address. I submitted FBAR for 2012 and 2013.

Thanks,
Rajani

RAJESH H DHRUVA;589356Dear Rajani

1. India has signed FATCA Agreement in substances on 11th April 2014.
2. However s study of few other final FATCA Agreements show that the Agreements are Para by Para similar.
3..These Agreements require banks and other financial institutions to report to IRS accounts of US citizens ; USA addressee or USA phone number on records if such account has balance exceeding US$ 50,000 as on 30th June 2014.
4. The balance as on 30th June is the only requirement for reporting .
5. Therefor account having balance of an amount less than US$ 50,000 as on 30th June will not be required to be reported even if the said account had larger balance prior to of after 30th June, 2014.
6. Balance of each account is to be verified and not sum total of balances in various accounts.
7. Its not as much the issue of Banks not reporting a specific account on being less than US$ 50,000 on 3oth June but for the accountholder to subsequently repatriate such undisclosed balances back to USA .
.02 It is possible that at such future date the soure may be inquired or non disclosure may be found by USA Authorities by any other reason say even by chance which will attract civil and criminal action.
8. It is therefor prudent and fruitful to report all heither to undisclsed accounts and opt for 5% penalty under the Streamlined Offshore Domestic Procedure paying 5% penelaty on maximum year end balances of last six yearsv ; pay Fed tax on such undisclosed Indian and file FBAR returns for previous six years.

Best wishes
RAJESH H DHRUVA
femaonline.com

Hello Rajesh:
Here's my situation:

We're all USC / OCI. In US currently.

My wife has a PPF in India at a post office (opened ~15+ years ago by my father-in-law (FIL)). Its maturing early 2015. Around Rs. 4 lacs now.
My daughter (17 years aged now) also had a PPF opened by my FIL at that time (15+ years back). Maturing early 2015. Around rs. 2 lacs now.

Cashing the PPF would mean putting the money in their names (wife and daughter's). That means opening a new account in india?

Is there any implication, do I need to report anything? Is there a way that money can be NOT in their name and in my FIL's name only ?

Thanks

Please reply Mr.Rajesh

Hi Rajesh,

Do we need to declare the Employee Provident Fund if the amount in that account is more than 10,000 dollars. If so what should I write the name and address in the case of the Financial Institution?

Thanks