Market regulator Sebi, last month, asked fund houses and other market intermediaries to register with US authorities and obtain a Global Intermediary Identification Number as a part of FATCA regulations by December 31, 2014.

Prior to that, India concluded an 'in substance' agreement on FATCA with the US in April to combat possible tax evasion by Americans through Indian financial entities.

While FATCA became a law way back in 2010, the final regulations were issued for it in January last year and it has come into effect from July after signing of agreements with different countries.

As per the new regulations, all financial institutions in India need to carry out a detailed due diligence on all their clients and report details of their US clients to the US tax department (Internal Revenue Service).

The law aims to check and impose withholding tax on illicit activities of some wealthy individuals who use offshore accounts to evade millions of dollars in taxes.

A non-compliance with FATCA entails 30 per cent withholding tax on certain U.S. source payments.

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