Rule 239 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 239 of the Income-tax Rules, 2026 lists the nine items a reporting financial institution must maintain and report for each reportable account, requires the statement in Form No. 166 by 31 May following the calendar year, and mandates a nil statement where nothing is found.
The nine reporting items
Sub-rule (1) of rule 239 sets out what must be maintained and reported for each reportable account. The 1962 parallel is rule 114G.
| Clause | Information |
|---|---|
| (a) | Name, address, taxpayer identification number assigned by the country of tax residence, and date and place of birth for an individual, of each reportable person who is an account holder |
| (b) | For an entity account holder found on due diligence to have controlling persons who are reportable persons — the entity's name, address and TIN, and the name, address, date and place of birth and TIN of each such controlling person |
| (c) | The account number or its functional equivalent |
| (d) | The account balance or value — including cash or surrender value for an insurance or annuity contract — at the end of the calendar year, or immediately before closure if closed during the year |
| (e) | For a custodial account — (i) total gross interest, dividends and other income paid or credited during the year; and (ii) total gross proceeds from sale or redemption of financial assets where the institution acted as custodian, broker, nominee or agent |
| (f) | For a depository account — the total gross interest paid or credited |
| (g) | For any other account — the total gross amount paid or credited to the holder where the institution is obligor or debtor, including redemption payments |
| (h) | For an account held by a non-participating financial institution, for calendar years 2015 and 2016 only — the name of each such institution paid and the aggregate of payments |
| (i) | For a non-U.S. account where an equity interest is held in an investment entity that is a legal arrangement — the roles by which the reportable person is an equity interest holder |
Read clauses (a), (b) and (c) of rule 239(1) carefully. Each carries a rider beginning "but in the case of an account other than a U.S. reportable account". Those riders add, for CRS reporting only: whether a valid self-certification was provided; whether the account is a joint account and how many holders; the type of account and whether it is pre-existing or new; and the role by which each controlling person controls the entity. An institution that built its data model on the original FATCA fields and later extended it to CRS is exactly the one that will be missing these — they are not in the U.S. reporting set at all.
The phased reporting years
The proviso to sub-rule (1) sets out what was reportable when — a schedule now historic but still on the face of rule 239:
| Calendar year | Items reportable | Accounts |
|---|---|---|
| 2014 | (a), (b), (c) and (d) | U.S. reportable accounts |
| 2015 | (a) to (d), (f), (g), (h) and (e)(i) | U.S. reportable accounts |
| 2016 | (a) to (h) | All reportable accounts |
| 2017 and later | (a) to (g) | All reportable accounts |
Clause (v) adds that for a U.S. reportable account maintained as on 30 June 2014, the TIN of a relevant person is not required if it is not in the institution's records.
When a TIN or place of birth is not required
- Sub-rule (4) — for a pre-existing account, the TIN or date of birth need not be reported if not in the institution's records; but the institution had to obtain them for pre-existing accounts by 31 December 2016 and report from calendar year 2017, and for non-U.S. accounts whenever the PMLA record-updating obligation arises.
- Sub-rule (5) — the TIN is not required at all where the relevant country issues none, including a functional equivalent, or where its domestic law does not require collection of it.
- Sub-rule (6) — the place of birth is not required unless it is available in the electronically searchable data maintained by the institution.
- Sub-rule (3) — where a person is resident in more than one country, the institution maintains the TIN for each.
Sub-rule (4)(b) of rule 239 is the provision that keeps the pre-existing account population moving. For a non-U.S. account, the institution must obtain the TIN and date of birth whenever it is required to update the information relating to that account under the PMLA rules. So the CRS data-completion exercise is welded to the periodic KYC refresh cycle rather than run as a separate campaign — and an institution whose KYC refresh does not capture foreign TIN and date of birth will keep reporting incomplete records indefinitely.
Sub-rule (7) adds a carve-out for the crypto era: gross proceeds under clause (e)(ii) need not be reported to the extent they are reported under the Crypto-Asset Reporting Framework — unless the institution elects otherwise for a clearly identified group of accounts. This applies to non-U.S. accounts only, and prevents the same disposal being reported twice.
The statement — Form No. 166
| Sub-rule | Requirement |
|---|---|
| (8) | The statement of reportable account under section 508(1)(k) is furnished for each account identified as reportable — and where no account is identified, a nil statement must be furnished |
| (9) | In Form No. 166, in the manner specified by the DGIT (Systems) with Board approval, for every calendar year by the 31st day of May following that year |
| (10) | To the Director or Joint Director of Income-tax (Intelligence and Criminal Investigation), by online transmission of electronic data to a designated server under digital signature issued by a Certifying Authority authorised by the Controller of Certifying Authorities |
Two things about rule 239 catch institutions out. First, sub-rule (8) requires a nil statement where the due diligence produced no reportable account. Silence is not compliance — an institution that finds nothing must say so. Second, the reporting period is the calendar year, with a 31 May deadline, both out of step with the Indian tax year and the return cycle. The data cut is at 31 December and the filing is five months later.
Governance — the Designated Director
Sub-rule (11) requires every reporting financial institution to communicate to the Principal DGIT (Systems) the name, designation and contact details of the Designated Director and the Principal Officer, and obtain a registration number. The statement is signed, verified and furnished by the Designated Director on the basis of information available with the institution — or, where the institution is a non-resident, by a person holding a valid power of attorney from that Designated Director.
The Designated Director is the person designated to ensure overall compliance under section 508, and the Explanation fixes who that must be:
| Institution | Designated Director |
|---|---|
| Company | The Managing Director or a whole-time Director as defined in the Companies Act, 2013, duly authorised by the Board |
| Partnership firm | The managing partner |
| Proprietorship | The proprietor |
| Trust | The managing trustee |
| AOP, BOI or other person | The person who controls and manages the affairs of the institution |
Sub-rule (12) then puts a duty on the regulator — the authority that licences, authorises, registers, regulates or supervises the institution — to issue instructions incorporating the reporting and due diligence requirements of rules 238 to 240 and to ensure the information is available.
Sub-rule (13) carries a transitional relief: for a non-U.S. reportable account maintained as of 31 December 2025 and for reporting periods ending by the second calendar year after that date, the role information under clauses (b) and (i) need only be reported if it is available in electronically searchable data.
Worked example
| Facts | Position under rule 239 |
|---|---|
| Due diligence finds no reportable account | A nil statement is still due |
| Statement filed on 31 July for the previous calendar year | Late — due 31 May |
| Account closed in September; year-end balance reported as nil | Report the balance immediately before closure |
| Joint CRS account; number of holders not captured | Required by the rider to clause (a) |
| Controlling person identified but not his role | Required for a non-U.S. account, subject to sub-rule (13) |
| Account holder resident in two foreign countries | Maintain the TIN for each |
| Jurisdiction issues no TIN | Not required under sub-rule (5) |
| Place of birth on a scanned form only | Not required unless electronically searchable |
| Crypto disposal already reported under the CARF | Gross proceeds need not be reported again |
| Statement signed by the compliance head | Must be signed by the Designated Director |
| Non-resident institution; Designated Director abroad | A holder of a valid power of attorney may sign |
Compliance checklist
- Capture the four extra CRS fields that rule 239 adds for non-U.S. accounts.
- Report the balance immediately before closure for accounts closed in the year.
- Distinguish custodial, depository and other accounts — each has its own income item.
- Weld foreign TIN and date of birth capture into the PMLA KYC refresh.
- Report a place of birth only where electronically searchable.
- File Form No. 166 by 31 May for the calendar year, and file nil if nothing is found.
- Register the Designated Director and Principal Officer and obtain the registration number.
- Ensure the person signing holds the office the Explanation requires.
Common mistakes
- Filing nothing where no reportable account is found.
- Running the reporting period on the tax year rather than the calendar year.
- Using the FATCA field set for CRS accounts.
- Treating TIN collection as a one-off campaign rather than a KYC-refresh obligation.
- Reporting a nil closing balance for an account closed mid-year.
- Having the statement signed by someone other than the Designated Director.
Which year this governs
The Income-tax Rules, 2026 are made under the Income-tax Act, 2025. The 1962 parallel to rule 239 is rule 114G, given for tracing only. The phased reporting years and the 2015-16 non-participating institution item are carried forward from the original implementation. Verify the current text and the Form No. 166 schema before filing.
Key Facts About Rule 239
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
What identifying information must be reported?
The name, address, taxpayer identification number and date and place of birth of each reportable person who is an account holder — and for a non-U.S. account, whether a valid self-certification was provided and whether the account is joint, including the number of joint holders.
What is reported for an entity account holder?
The entity's name, address and TIN, and the name, address, date and place of birth and TIN of each controlling person who is a reportable person — and for a non-U.S. account, the role by which each is a controlling person and whether a valid self-certification was provided.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
Rule 239: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.