As a Non-Resident Indian (NRI), you may have come across the term BEN-2 form when dealing with investments in India. But what exactly is the BEN-2 form, and why is it important? In this article, we’ll explain everything you need to know about the BEN-2 form.
What is the BEN-2 Form?
BEN-2 stands for “Beneficial Ownership Form-2.” It is a document that needs to be filled out by Non-Resident Indians (NRIs) who own investments in India. The form is used to establish the ultimate beneficial owner (UBO) of the investment, which is the person who ultimately benefits from the investment.
The BEN-2 form was introduced by the Government of India in 2018 as a part of the Prevention of Money Laundering Act (PMLA). The aim of the BEN-2 form is to prevent money laundering and to ensure transparency in financial transactions.
Why is the BEN-2 Form Important?
The BEN-2 form is important because it helps the authorities to establish the true ownership of an investment. This is particularly important in cases where the investment is held through a complex structure, such as a trust or a company. The BEN-2 form helps to identify the UBO of the investment, which is the person who ultimately controls and benefits from the investment.
By establishing the UBO of an investment, the authorities can ensure that the investment is not being used for illegal activities such as money laundering or terrorist financing. It also helps to prevent tax evasion, as the authorities can ensure that the investment is being taxed appropriately.
How to Fill out the BEN-2 Form?
The BEN-2 form is a simple one-page document that can be filled out online or in paper form. The form requires the following information:
- Name of the Non-Resident Indian (NRI) holding the investment
- Permanent Account Number (PAN) of the NRI
- Name of the company or entity through which the investment is held
- Identification number of the company or entity (such as a CIN or DIN)
- Details of the beneficial owner (UBO) of the investment
- Declaration by the NRI confirming the accuracy of the information provided
It is important to ensure that the information provided on the BEN-2 form is accurate and up-to-date. Any changes in ownership or control of the investment must be reported to the authorities within a specified period.
Conclusion
The BEN-2 form is an important document for Non-Resident Indians (NRIs) who own investments in India. It helps to establish the ultimate beneficial owner (UBO) of the investment, which is the person who ultimately controls and benefits from the investment. By ensuring transparency in financial transactions, the BEN-2 form helps to prevent money laundering, terrorist financing, and tax evasion. If you are an NRI who owns investments in India, it is important to understand and comply with the requirements of the BEN-2 form.
Other Related Blogs: Section 144B Income Tax Act
Frequently Asked Questions (FAQs)
Q: What is the BEN-2 form?
A: BEN-2 form stands for Beneficial Ownership Form-2. It is a document that needs to be filled out by Non-Resident Indians (NRIs) who own investments in India to establish the ultimate beneficial owner (UBO) of the investment.
Q: Why is the BEN-2 form necessary?
A: The BEN-2 form is necessary to prevent money laundering, terrorist financing, and tax evasion. It helps to establish the UBO of an investment, which is the person who ultimately controls and benefits from the investment.
Q: Who needs to fill out the BEN-2 form?
A: The BEN-2 form needs to be filled out by Non-Resident Indians (NRIs) who own investments in India.
Q: What information is required to fill out the BEN-2 form?
A: The BEN-2 form requires the following information: name of the NRI holding the investment, Permanent Account Number (PAN) of the NRI, name of the company or entity through which the investment is held, identification number of the company or entity (such as a CIN or DIN), details of the beneficial owner (UBO) of the investment, and a declaration by the NRI confirming the accuracy of the information provided.
Q: Can the BEN-2 form be filled out online?
A: Yes, the BEN-2 form can be filled out online or in paper form.
Q: Is it necessary to update the BEN-2 form in case of changes in ownership or control of the investment?
A: Yes, it is necessary to update the BEN-2 form in case of changes in ownership or control of the investment within a specified period.
Q: What is the penalty for non-compliance with the BEN-2 form requirements?
A: Non-compliance with the BEN-2 form requirements can result in penalties or fines, as well as legal action by the authorities. It is important to ensure compliance to avoid any legal or financial consequences.
As a Newbie, I am always exploring online for articles that can aid me. Thank you
I would really like you to become a guest poster on my blog.