SEBI Tightens KYC Rules For Financial Firms, New Tax Reporting Framework Demands Major System Upgrades
Mumbai: Market regulator Securities and Exchange Board of India (SEBI) has directed financial intermediaries to upgrade their Know Your Customer (KYC) and tax reporting systems to comply with revised international tax disclosure requirements. In a circular issued on November 11, SEBI instructed registered intermediaries classified as Reporting Financial Institutions (RFIs) to incorporate updated…
The Securities and Exchange Board of India (SEBI) has announced stricter Know Your Customer (KYC) and tax reporting requirements for financial intermediaries in a move to align with international standards. This directive, issued on November 11, requires registered intermediaries, classified as Reporting Financial Institutions (RFIs), to upgrade their KYC and tax reporting systems to incorporate updated Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) requirements.
These changes are a direct response to the implementation of the Income-Tax Act, 2025, and Income-Tax Rules, 2026, which replaced the previous legislation effective April 1, 2026. SEBI emphasized that these upgrades are crucial for enhancing financial transparency, improving reporting accuracy, and ensuring compliance with international tax disclosure standards.
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