Good news for NPS account holders, who have not submitted, FATCA (Foreign Account Tax Compliance Act) details, would not have to any more face the fear the getting their accounts blocked. The Pension Fund Regulatory and Development Authority has clarified that NPS accounts will stay secure even if they could not provide FATCA details. Clarification in this case has been promptly sent to about 40 lakh NPS investors in their registered email addresses.
“It is a self-certification process, and does not require any documents to be submitted,” points out Manoj Nagpal, CEO of Outlook Asia Capital. With everything going digital, observers find offline FATCA declaration to be an unnecessary addition to paperwork. It would be like going backward to traditional means, when digitization is on roll. Mutual funds accept online submission of the FATCA declaration.
Offline FATCA brings the requirement of centralized KYC to light, which is the need of the hour and is supposed to apply to all financial dealings of an individual. When FATCA is a self-certification submitted by an individual to mutual funds and banks, it should also work NPS as well. “The requirement for another FATCA self-certification shows how the systems are still not talking to each other,” adds Nagpal.
Previously, investors had been warned to submit a physical signed self-certification of the FATCA by 30 April. Delay or failure in submission may cause blocking of such NPS account. The PFRDA is expected to issue fresh guidelines soon.