The deadline for the first data transmission under the Foreign Account Tax Compliance Act (FATCA) is coming soon, and some countries are still scrambling to get their processes and agreements in order. India is among these jurisdictions, as it will soon try to extend its timeline for signing a formal intergovernmental agreement with the U.S. to comply with the international tax legislation, according to The Financial Express.
Currently, India has an IGA in substance. In early December 2014, the U.S. Treasury Department announced it would treat such agreements as compliant if the jurisdictions passed a monthly review to determine whether their governments are making a significant effort to reach a formal agreement.
Sources told The Financial Express India's Finance Ministry is doing what it can to get closer to a signed IGA. One issue that has slowed the process is the necessary involvement of various government agencies and regulators.
If India doesn't get the requested extensions, financial institutions in the country would be required to update their statuses in the IRS registration system and file with the IRS directly.