The Central Board of Direct Taxes (CBDT), under India's Ministry of Finance, released a revised Guidance Note on FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard) to strengthen Automatic Exchange of Information (AEOI) frameworks. This updated note clarifies due diligence obligations, reporting requirements, and entity classification for Financial Institutions. India participates in AEOI under the OECD-led CRS framework and the bilateral India-US FATCA Intergovernmental Agreement (IGA), both aimed at curbing cross-border tax evasion.

FATCA and CRS are two parallel but distinct frameworks designed to combat offshore tax evasion through automatic information sharing between tax authorities globally. FATCA is a US law requiring foreign financial institutions to report US account holders' data to the IRS, typically via an Intergovernmental Agreement (IGA). India signed a Model 1 IGA with the US in 2015, making CBDT the competent authority for compliance. CRS is the OECD's multilateral standard adopted by over 100 jurisdictions, including India, enabling tax authorities to automatically receive information on residents' foreign financial accounts annually. India exchanges CRS data through the Multilateral Competent Authority Agreement (MCAA). The CBDT guidance note matters because it operationalises these frameworks domestically — telling banks, mutual funds, insurance companies, and depositories exactly how to classify accounts, perform due diligence, and file reports. The revised note is significant for RBI Grade B and SEBI Grade A aspirants because it sits at the intersection of international tax law, financial regulation, and AML/CFT compliance. For SEBI, regulated entities like brokers and depository participants are Reporting Financial Institutions under CRS. For RBI, commercial banks must identify Reportable Accounts and submit returns. Non-compliance attracts penalties, making the guidance note operationally critical for India's financial sector.