FATCA (Foreign Account Tax Compliance Act) is a US law requiring Indian financial institutions to report accounts held by US persons — investors must declare their tax residency status when investing.
FATCA is a US legislation that requires foreign financial institutions (including Indian mutual fund houses) to report financial accounts held by US citizens or US tax residents to the US Internal Revenue Service (IRS). India signed a bilateral agreement with the US (IGA) for FATCA compliance. All mutual fund investors must submit a FATCA self-certification declaring: their country of tax residence, tax identification number (TIN), and whether they are a US person. This is typically a one-time declaration linked to your PAN/KYC.
FATCA is primarily relevant if you are a US citizen, US green card holder, or US tax resident investing in Indian mutual funds. When you complete KYC, you'll see a FATCA declaration form asking if you're a 'US Person' and for your US TIN if yes. Most Indian residents are simply 'India Tax Resident' — you fill that in and move on. It's a compliance requirement, not a tax in itself.
At the time of KYC or when prompted, fill FATCA self-certification form.
Declare: country of tax residence, TIN, place of birth.
If US Person: AMC reports account details to CBDT, which shares with US IRS.
Indian residents simply declare India as their tax residence — no further action needed.