Tax reporting lapses may hit sovereign rating, warns I-T official

Persistent lapses in international tax reporting under FATCA and CRS could risk India’s sovereign credit rating, and financial institutions with US clients may face withholding tax penalties, Debjyoti Das, Principal Director General of Income Tax (Intelligence & Criminal Investigation), warned on Thursday, 5 November 2026. Speaking at a summit in Mumbai, Das said non-compliance ‘can have certain adverse consequences’ including a ‘downward rating for the country’.

Das said 97 to 98 per cent of flagged reporting defects relate to Tax Identification Numbers that are missing, incorrectly formatted or mismatched. He attributed the errors to inadequate data collection during customer onboarding, NRIs failing to update KYC details after relocating, and rising reporting volumes. The department is launching training for relationship managers in Mumbai, Delhi, Bengaluru and Kochi, and plans to consult SEBI and RBI on streamlining account-opening procedures.

Update, 6 November 2026: Business Today now also reports the warning from Debjyoti Das, confirming the 97 per cent TIN defect figure. It adds that the department proposed regular webinars, nodal officers and a dedicated helpdesk to support financial institutions.