FATCA & CRS Reporting for NRIs: Everything You Should Know
Neha Navaneeth
Marketing & Content Associate
Nov 18, 2025
NRIs must submit FATCA and CRS forms when they want to invest in India. But what do they mean?
FATCA stands for Foreign Account Tax Compliance Act, a US-specific law for the citizens of the USA, and the Common Reporting Standard (CRS) is an Organisation for Economic Co-operation and Development (OECD) initiative for all participating countries.
Both of these enable automatic exchange of financial information between countries to prevent tax evasion. NRIs must provide FATCA and CRS self-declaration when they open Indian financial accounts for banking or investing. This blog explains in detail what is FATCA CRS, importance, and the differences.
What is FATCA and CRS?
Every country wants its working members to pay appropriate taxes. Citizens or tax residents of the USA or other foreign countries can hold offshore accounts and assets. However, hiding such information is not allowed. To avoid tax evasion and ensure proper tax payment, countries need a transparent system of communication. FATCA and CRS serve that purpose.
The Foreign Account Tax Compliance Act (FATCA) is a U.S. federal law enacted in 2010 to combat tax evasion by U.S. persons using foreign accounts.
The The Common Reporting Standard (CRS) is an international tax initiative developed by the OECD to combat offshore tax evasion.
FATCA for NRI
FATCA tracks the overseas earnings of tax-paying US citizens and tax residents. The strict adherence to these rules helps the US government to ensure that the taxpayers don’t evade tax by stashing their assets in other countries. For US taxpayers (single-filers), if their foreign accounts hold assets with a value greater than $50,000, they must disclose that information to the Internal Revenue Service (IRS).
To implement FATCA, the Indian government signed an Inter-Governmental Agreement (IGA) with the USA in 2015. So, Indian tax officials need FATCA documents from NRI investors living in the US. The financial institutions require you to report your income and personal details when you invest in India from the US.
Both old and new NRI investors must submit.
Name
PAN number
Address details
Place of birth
Country of birth
Nationality
Gross annual income
Occupation
US citizens or green card holders must mention the USA as their country of residence. This declaration is needed for NRIs who have moved to India and are currently Indian residents.
CRS for NRI
Financial institutions in countries (90+) that are a part of OECD must provide information about their citizens and their overseas assets following CRS. So, the participating countries’ governments can get transparent information about the financial assets their citizens hold overseas.
As India is a key partner among OECD countries, NRIs must provide a CRS self-declaration when they live and work in one of the 90+ countries. Documents like a passport, a PAN card, an address proof, etc, may be required.
Differences Between FATCA and CRS
Here are the main differences between FATCA and CRS self-declaration:
Aspect | FATCA | CRS |
Applicability | Applies specifically to U.S. citizens and tax residents, including NRIs with U.S. status. | Applies to tax residents of any of the more than 90 countries participating in the agreement. |
Purpose | Prevents tax evasion by U.S. persons holding offshore accounts. | Promotes global tax transparency and prevents offshore tax evasion on a multilateral scale. |
Mechanism | Indian financial institutions report U.S. person account details to Indian tax authorities, who then share the information with the U.S. Internal Revenue Service (IRS). | Indian financial institutions report the financial information of non-Indian tax residents to Indian tax authorities, which then automatically relay it to the resident's tax authority. |
Reporting threshold | A minimum threshold of $50,000 applies for reporting financial assets, with higher thresholds for those living abroad or filing jointly. | There is no minimum reporting threshold. |
Required form | U.S. taxpayers use IRS Form 8938 to report their foreign financial assets, in addition to FinCEN Form 114 (FBAR). | Investors provide a self-certification form to their Indian financial institution as part of the Know Your Customer (KYC) process. |
Why NRIs Should Know About What is FATCA and CRS?
NRIs investing in mutual funds, shares, or other assets (except for residential properties in their own name) in India must complete the FATCA and CRS declaration. It’s an integral part of NRI KYC. Banks and financial institutions need these self-declarations to:
Ensure legal compliance with international tax regulations
Prevent tax evasion
Avoid double taxation
Increase transparency of cross-border financial transactions.
Avoid restrictions on NRI investments.
If NRIs fail to attach FATCA and CRS declarations while making investments or opening bank accounts, the consequences can be severe:
Rejection of investment: Without the self-declaration of FATCA and CRS, the investment KYC will be incomplete. As a result, banks and financial institutions can reject investment applications.
Account freeze/restrictions: Banks can freeze accounts and mutual fund accounts without FATCA and CRS declarations. Depending on the financial institutions, the account may also be restricted. NRIs who didn’t complete FATCA and CRS KYC may not be able to redeem their investment income.
Penalties: Non-compliance and non-disclosure of overseas earnings can result in penalties from the IRS for US taxpayers. It can also result in penalties without CRS forms. The Income Tax Department of India may levy a penalty of ₹50,000 for financial institutions for not furnishing correct statements and an additional ₹5000 penalty for inaccurate reportable accounts. The financial institutions, in turn, may recover this amount from the account holder.
Double taxation: For some types of profits (like salaries for services offered in India, rental income, royalties for technical services), the income earned in India may have provisions to be taxed in the resident country as well. When a foreign country has a DTAA agreement with India, NRIs can avoid this double taxation. FATCA and CRS declarations are crucial to claim DTAA relief.
How NRIs Can Ensure FATCA and CRS Compliance?
To ensure that your financial profile is transparent and compliant for cross-border transactions, follow the tips given below:
Confirm tax residency each year: At the end of every financial year, review your tax residence. Even a short stay in another country or a change in visa status can impact your tax obligations.
Complete KYC: Review KYC with all banks and mutual fund accounts to refresh self-certification as per FATCA and CRS self-declaration. Re-submit KYC in case there is an alteration in personal or income-related information.
Update documents: Keep all your documents PAN, passport, and tax identification number current, consistent, and valid across all accounts.
Declare foreign assets and income: Foreign assets and income must be declared in accordance with the tax laws of the country of tax residence. FATCA and CRS disclosures must be thorough to avoid unnecessary taxation.
Conclusion
Tax evasion is a universal problem that multiple countries come together to prevent and avoid. For NRIs, it is compulsory to comply with these tax rules to avoid tax penalties and freeze accounts. Whenever you invest in India, ensure that you complete KYC with FATCA and CRS self-declaration. Although it's an additional step, it ensures the right taxes will be paid, avoiding double taxation by provision.
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Frequently Asked Questions
Do all NRIs need to submit FATCA/CRS forms?
Yes, whether you open a bank, demat, or investment account in India, you must complete FATCA and CRS self-declarations.
If I am not a US person, should I submit the FATCA form?
FATCA applies only for US taxpayers. So, if you live in other countries, FATCA may not be needed, but CRS is required.
Can FATCA/CRS forms affect my NRE/NRO accounts or investments in India?
Yes, your KYC will be incomplete if you don’t provide FATCA/ CRS forms. So, the banks or financial institutions may impose restrictions on your accounts until you provide the required details.
What if I move to another country and change my resident status in the middle of the financial year?
If you move to another country or your tax residency status changes, you must update your FATCA/ CRS declaration immediately with all banks and investment accounts. Discrepancies in account information can invite additional processing or penalties due to non-compliance.
