Top Stories Revise ITR to Show Foreign Assets or Face Rs. 10 Lakh Penalty! Income Tax Dept warns Taxpayers The reminders aim to guide taxpayers in completing the mandatory “Foreign Asset (FA)” and “Foreign Source Income (FSI)” schedules in their ITRs By Manu Sharma – On November 18, 2024 12:30 pm – 2 mins read The Income Tax Department has launched a compliance campaign, asking taxpayers to report foreign assets in their Income Tax Returns ( ITR ) for Assessment Year ( AY ) 2024-25. Taxpayers failing to disclose such assets or foreign income could incur a hefty penalty of ₹10 lakh under the Black Money ( Undisclosed Foreign Income and Assets ) and Imposition of Tax Act, 2015.

The compliance-cum-awareness initiative includes targeted SMS and email reminders to taxpayers who may hold foreign assets or income. These individuals have been flagged through information obtained under bilateral and multilateral agreements. Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here

The Central Board of Direct Taxes (CBDT) clarified that even if an individual’s income is below the taxable threshold or the foreign asset was acquired through disclosed sources, it is mandatory to report such details in the ITR. This advisory targets taxpayers who might have omitted the FA schedule in their previously submitted ITRs, especially in cases involving high-value foreign assets.

What Qualifies as a Foreign Asset? For Indian residents, foreign assets encompass: – Bank accounts held abroad. – Custodial accounts and financial interests in entities or businesses overseas. – Immovable properties, trusts (as trustees or beneficiaries), and capital assets located abroad. – Income earned from foreign jurisdictions or assets such as insurance or annuity contracts held overseas. Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here The penalty for nondisclosure is ₹10 lakh, as stipulated under the Black Money Act. The CBDT stated that this penalty applies irrespective of whether the income or asset was acquired from disclosed funds. The Income Tax Department has set December 31, 2024, as the deadline for filing revised or belated ITRs. Taxpayers are urged to review their filings and ensure compliance to avoid the harsh penalties.