Finance Income Tax

SEBI FATCA CRS Circular November 2026: Form 166 Replaces Form 61B for Brokers and Depository Participants

CA Adityavikram Banka

Key Takeaways

  • SEBI’s circular HO/38/14/(18)2026-MIRSD-POD2/I/25560/2026 dated 11 November 2026 moves FATCA and CRS reporting by SEBI intermediaries onto section 508 of the Income-tax Act 2025, rules 238 to 240 of the Income-tax Rules 2026 and Form 166, which replaces Form 61B.
  • Every SEBI-registered intermediary that is a Reporting Financial Institution (RFI) must build the AEOI due diligence into its onboarding and KYC, and refer to the CBDT Guidance Note on FATCA and CRS dated 24 July 2026.
  • Four system changes are named in the circular: the self-certification validity indicator, Controlling Person roles, account type and pre-existing/new status, and new mandatory fields in the Form 166 XML.
  • Intermediaries must upload the FATCA and CRS certification obtained from clients to the KYC Registration Agencies (KRAs). The onus for the certification and reporting lies solely with the intermediary.
  • Per the CBDT Guidance Note, Form 166 for calendar year 2026 is due by 31 May 2027, and a NIL statement is required where no reportable account is found.

The SEBI FATCA CRS circular of November 2026 updates instructions that SEBI first issued in 2015. SEBI’s circulars of 26 August 2015 (CIR/MIRSD/2/2015), 10 September 2015 (CIR/MIRSD/3/2015) and 20 February 2024 (SEBI/HO/MIRSD/SECFATF/P/CIR/2024/12) were issued under section 285BA of the Income-tax Act 1961, rules 114F to 114H and Form 61B of the Income-tax Rules 1962. As para 2 of the new circular records, the Income-tax Act 2025 and the Income-tax Rules 2026 replaced those with effect from 1 April 2026. SEBI-registered intermediaries that are Reporting Financial Institutions now report under the new provisions, and the self-certification their clients give changes with them.

What does the SEBI FATCA CRS circular of 11 November 2026 require?

The circular is issued under section 11(1) of the SEBI Act 1992 read with rule 239(12)(a) of the Income-tax Rules 2026. That rule requires a regulator to issue instructions to its regulated financial institutions to build in the reporting and due diligence procedures of rules 238 to 240, and to prescribe how account information is maintained.

Item Up to 31 March 2026 From 1 April 2026
Charging provision for the statement Section 285BA, Income-tax Act 1961 Section 508, Income-tax Act 2025
Due diligence and reporting rules Rules 114F to 114H, Income-tax Rules 1962 Rules 238 to 240, Income-tax Rules 2026
Annual statement of reportable accounts Form 61B Form 166
Who must report Reporting Financial Institutions: “RFI” is defined in rule 238(8) and “Financial Institution” in rule 238(3) of the 2026 Rules

Para 5 directs all registered intermediaries that are RFIs to take the steps needed to comply with rules 238 to 240 and to refer to the CBDT Guidance Note on FATCA and CRS dated 24 July 2026.

The four system changes intermediaries must make

Para 6 requires registered intermediaries to incorporate AEOI reporting and due diligence into customer onboarding and KYC, maintain the information needed for the 2026 Rules, and review and update the following:

  1. Self-certification: collection procedures must capture the validity indicator.
  2. Controlling Persons: identification systems must capture the role of each Controlling Person (settlor, trustee, protector, beneficiary or other).
  3. Account classification: systems must capture the account type and whether the account is pre-existing or new.
  4. Form 166 XML: generation software must include all new mandatory fields. The circular states that failure to include required fields will result in validation errors on the Income Tax portal.

Para 7 requires intermediaries to upload the FATCA and CRS certification obtained from clients to the KRA systems. Para 8 places the onus of obtaining and reporting the certification and related compliances solely on the intermediary.

Form 166: the new mandatory fields, deadline and transition

The CBDT Guidance Note explains what sits behind para 6. It lists six data elements in Form 166 that are mandatory and introduced by the 2025 amendments to the Common Reporting Standard:

  1. a valid self-certification indicator for the account holder;
  2. a joint account indicator and the number of joint holders;
  3. the role of each Controlling Person;
  4. a valid self-certification indicator for each Controlling Person;
  5. the account type (Depository, Custodial, Equity/Debt Interest, Cash Value Insurance, Annuity, Specified Electronic Money Product, Central Bank Digital Currency) and the pre-existing/new indicator;
  6. the role of an equity interest holder in an investment entity that is a legal arrangement, such as a trust.

The Guidance Note asks RFIs to have these fields in their Form 166 software before the 31 May 2027 filing deadline for calendar year 2026 data. Reporting is on a calendar-year basis: balances are reported as at 31 December and Form 166 is filed by 31 May of the following year. Where no reportable account is found after due diligence, a NIL statement is filed in the same manner as a substantive report, using the Designated Director’s digital signature certificate (rule 239(8) to (11), as cited in the Guidance Note).

Is there any relief for older accounts?

Yes, for Controlling Person roles. The Guidance Note explains that, under rule 239(13), for non-US reportable accounts maintained as of 31 December 2025, the Controlling Person role need only be reported if it is in the RFI’s electronically searchable data, for reporting periods ending by 31 December 2027. After that, the role must be reported for all reportable accounts. The Guidance Note applies the same transitional window to the equity interest holder role.

What are the consequences of not reporting?

The Guidance Note states that penalties under sections 454 and 455 of the Income-tax Act 2025, as applicable from time to time, apply to failure to furnish the statement and to inaccurate reporting or failure to follow due diligence. Read those sections as in force for the reporting period concerned.

What this means for founders, NRIs and their CAs

  • Clients with foreign tax residence: expect your broker, depository participant or fund manager to ask for a fresh or updated FATCA/CRS self-certification. Under the circular, the intermediary must upload it to the KRA.
  • Trusts, family holding entities and passive entities: intermediaries now have to record the role of each Controlling Person (settlor, trustee, protector, beneficiary or other). Keep these details ready for every demat or broking account held by such an entity.
  • Intermediaries and their compliance teams: the circular asks for system changes, not just a form swap. Self-certification workflows, classification fields and the Form 166 XML all need updating.

The circular sits alongside SEBI’s separate KYC framework for NRIs, OCIs and foreign nationals from 3 December 2026. For how AEOI data reaches an individual’s tax records, see our note on foreign assets in the AIS and Schedule FA.

Action checklist for SEBI intermediaries

  1. Confirm whether your entity is a Reporting Financial Institution under rule 238(8) of the Income-tax Rules 2026.
  2. Update self-certification forms and workflows to capture the validity indicator, for account holders and Controlling Persons.
  3. Add Controlling Person role, joint holder, account type and pre-existing/new fields to your account master.
  4. Update your Form 166 XML software for all mandatory fields before the 31 May 2027 filing for calendar year 2026.
  5. Upload FATCA and CRS certifications obtained from clients to the KRA systems.
  6. File a NIL Form 166 where due diligence finds no reportable account.

Sources

  • Source: Securities and Exchange Board of India, Circular HO/38/14/(18)2026-MIRSD-POD2/I/25560/2026 dated 11 November 2026, “Reporting requirement under FATCA and CRS revised through Income-Tax Act, 2025 read with Income-Tax Rules, 2026”, sebi.gov.in.
  • Source: Central Board of Direct Taxes, Guidance Note on FATCA and CRS, released 24 July 2026, incometaxindia.gov.in.

Need help with FATCA and CRS onboarding?

If you run an intermediary or hold investments through a trust or foreign-resident structure, Tax Update India can help you work through the new self-certification and reporting fields. Book a quick call to review your onboarding documents.

Disclaimer: This article is for general information only and reflects the SEBI circular and CBDT Guidance Note cited above as on 13 November 2026. It is not legal advice. Please consult a qualified professional before acting on it.

CA Adityavikram Banka
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