The Income Tax Department cautioned taxpayers that failure to disclose assets held abroad or income can attract a penalty
The Income-Tax Department on Sunday issued a warning to taxpayers, stating that non-disclosure of foreign assets or income earned abroad in their Income Tax Returns (ITR) could lead to a penalty of Rs 10 lakh under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
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Compliance-Cum-Awareness Campaign Launched
The department issued a public advisory as part of a compliance-cum-awareness campaign launched recently by it on Saturday to ensure that such information is reported by the assessee in their ITR for assessment year (AY) 2024-25.
Definition of Foreign Asset
The advisory specified that foreign asset, for a tax resident of India in the previous year, includes bank accounts, cash value insurance contracts or annuity contracts, financial interest in any entity or business, immovable property, custodial accounts, equity and debt interest, trusts in which a person is a trustee, beneficiary of the settlor, accounts with singing authority, any capital asset, etc., held abroad.
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Mandatory Disclosure of Foreign Assets
The department said taxpayers figuring under this criteria “must mandatorily” fill the foreign asset (FA) or foreign source income (FSI) schedule in their ITR even if their income is “below the taxable limit” or the asset abroad was “acquired from disclosed sources.”
Penalty for Non-Compliance
“Failure to disclose foreign asset/income in the ITR can attract a penalty of Rs 10 lakh under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015,” the advisory stated.
Outreach Efforts by CBDT
The Central Board of Direct Taxes (CBDT), the administrative body for the tax department, had said that as part of the campaign, it would send “informational” SMS and email to those resident taxpayers who have already filed their ITR for AY 2024-25.
Read More: ITR For AY 2024-25: Income Tax Department Targets Undisclosed Foreign Assets With New Campaign
Identification Through Agreements
The communication will be sent to persons who have been “identified” through information received under bilateral and multi-lateral agreements “suggesting” that these individuals may hold foreign accounts or assets, or have received income from foreign jurisdictions.
Purpose of the Campaign
The campaign’s purpose is to remind and guide those who may not have fully completed scheduled foreign assets in their submitted ITR (AY 2024-25), especially in cases involving high-value foreign assets, the CBDT said.
Belated ITR Due Date
The last date to file a belated and revised ITR is December 31.
(With PTI inputs)
