Obligation to furnish statement of Information

     The existing provisions of section 285BA of the Act provide for filing of an annual information return by specified persons in respect of specified financial transactions which are registered or recorded by them and which are relevant and required for the purposes of the Act to the prescribed income-tax authority.

     With a view to facilitate effective exchange of information in respect of residents and non-residents, it is proposed to amend the said section so as to also provide for furnishing of statement by a prescribed reporting financial institution in respect of a specified financial transaction or reportable account to the prescribed income-tax authority. It is further proposed that the statement of information shall be furnished within such time, in the form and manner as may be prescribed.

     It is further proposed to provide that where any person, who has furnished a statement of information under sub-section (1), or in pursuance of a notice issued under sub-section (5), comes to know or discovers any inaccuracy in the information provided in the statement, then, he shall, within a period of ten days, inform the income-tax authority or other authority or agency referred to in sub-section (1) the inaccuracy in such statement and furnish the correct information in the manner as may be prescribed.

     It is also proposed that the Central Government may, by rules, specify,- (a) the persons referred to in sub-section (1) of section 285BA to be registered with the prescribed income-tax authority; (b) the nature of information and the manner in which such information shall be maintained by the persons referred to in (a) above; and (c) the due diligence to be carried out by the persons referred in (a) for the purpose of identification of any reportable account referred to in sub-section (1) of section 285BA.

     Further, the existing provisions of section 271FA of the Act provide for penalty for failure to furnish an annual information return. It is proposed to amend the said section so as to provide for penalty for failure to furnish statement of information or reportable account.

     It is also proposed to insert a new section 271FAA so as to provide that if a person referred to in clause (k) of sub-section (1) of section 285BA, who is required to furnish a statement of financial transaction or reportable account, provides inaccurate information in the statement and where, (a) the inaccuracy is due to a failure to comply with the due diligence requirement prescribed under sub-section (7) of section 285BA or is deliberate on the part of the person; or (b) the person knows of the inaccuracy at the time of furnishing the statement of financial transaction or reportable account, but does not inform the prescribed income-tax authority or such other authority or agency; or (c) the person discovers the inaccuracy after the statement of financial transaction or reportable account is furnished and fails to inform and furnish correct information within the time specified under sub-section (6) of section 285BA, then, the prescribed income-tax authority may direct that such person shall pay, by way of penalty, a sum of fifty thousand rupees.

     These amendments will take effect from 1st April, 2015.

[Clauses 65, 66 & 71]

Reporting obligation: penalty for inaccurate financial-account reporting where due diligence fails or inaccuracies are not corrected. Prescribed reporting financial institutions must furnish a statement of information for specified financial transactions and reportable accounts in the prescribed time, form and manner; they must notify the income-tax authority of any inaccuracy and furnish corrected information within ten days. The Central Government may prescribe registration, information maintenance norms and due diligence for identifying reportable accounts. Penalty rules are extended to failure to furnish statements and a new provision permits a penalty where inaccuracies result from failure of due diligence, deliberate action, or failure to disclose or correct known inaccuracies.