SEBI firms: new FATCA and CRS reporting and KYC rules
SEBI-registered firms that report foreign accounts must update their KYC forms, systems and tax filings under the new Income-tax Act, 2025.
- Document
- Circulars
- Dated
- 11 Nov 2026
- Effective
- Income-tax Act, 2025 applies from April 1, 2026 (para 2); the circular itself gives no effective date. The CBDT Guidance
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- SEBI-registered firms that qualify as Reporting Financial Institutions must update their KYC and reporting systems.
- Onboarding must now capture self-certification validity, controlling-person roles and account type.
- Form 166 XML files must include all new mandatory fields, or the tax portal rejects them.
- FATCA and CRS certifications from clients must be uploaded to KYC Registration Agencies (KRAs).
- The circular itself sets no deadline.
In short
SEBI, the market regulator, has told firms it oversees how to follow the foreign-account reporting rules under India's new Income-tax Act, 2025. FATCA (the US law requiring reporting of American-linked accounts abroad) and CRS (the global version of this exchange of account information) are the two rules covered. The circular passes those rules on to SEBI-registered firms and says what they must update.
What has changed
How it worked before
Until now, these reporting duties came under Section 285BA (the old reporting clause) of the Income-tax Act, 1961, with Rules 114F to 114H and Form 61B. SEBI's circulars from 2015 and 2024 told firms how to comply under those older provisions.
What has changed
From April 1, 2026, the Income-tax Act, 2025 and Income-tax Rules, 2026 replace the 1961 Act. Reporting now runs under Section 508 (the new reporting clause), Rules 238 to 240 and Form 166. Firms must also record three things: whether a client's self-certification is still valid, the role of each controlling person (settlor, trustee, protector, beneficiary or other), and each account's type and whether it is pre-existing or new.
Who this affects
SEBI-registered firms that qualify as Reporting Financial Institutions, as defined in Rule 238(8) of the new rules. If you run or work in such a firm, the duties below apply to you. The circular does not apply them to other firms.
An example
A small investment firm registered with SEBI opens an account for a client who is a trustee of a family trust. Under the new rules, the onboarding form must record the client's role as trustee, whether the account is new or pre-existing, and whether the client's self-certification is still valid. The firm's Form 166 file must carry every new mandatory field, or the tax portal will reject it.
What you should do
Update your onboarding and KYC forms and systems to capture the three items above. Check that your Form 166 XML software includes all new mandatory fields. Upload the FATCA and CRS certifications you hold from clients to the KRAs. The CBDT's Guidance Note on FATCA and CRS, dated July 24, 2026, is worth reading alongside this.
If you do nothing
The circular states no penalty or interest. It does say that the duty to obtain and report FATCA and CRS certifications lies solely with the intermediary. In practice, a Form 166 file missing mandatory fields will show validation errors on the Income Tax portal.
The terms explained
- Reporting Financial Institution
- A financial firm that must report certain foreign-linked account details to the tax department. The new rules define who qualifies in Rule 238(8).
- Controlling person
- The individual who really controls an account held through a company, trust or similar body. Roles include settlor, trustee, protector and beneficiary.
- Self-certification
- A declaration a client signs stating where they are tax resident. Firms collect it for FATCA and CRS purposes.
- KYC Registration Agency (KRA)
- A registered agency that stores and shares customers' KYC (know your customer) records for market intermediaries.
- Form 166
- The reporting form under the new Income-tax Rules, 2026, which firms file in XML format for FATCA and CRS details.
The original document
| Issued by | SEBI |
|---|---|
| Document | Circulars |
| Full title | Reporting requirement under Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) revised through Income-Tax Act, 2025 read with Income-Tax Rules, 2026 |
| Issued on | 11 November 2026 |
| Effective | Income-tax Act, 2025 applies from April 1, 2026 (para 2); the circular itself gives no effective date. The CBDT Guidance |
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