Taxpayers who fail to disclose foreign assets or income in their ITR could face a penalty of Rs 10 lakh under the anti-black money law.
The Income Tax Department has issued a stern warning to taxpayers regarding the non-disclosure of foreign assets and income in their Income Tax Return (ITR). Failure to comply with this requirement can result in 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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Mandatory Disclosure of Foreign Assets
The department highlighted that taxpayers who are residents of India and own assets abroad must declare these in their ITR for the assessment year (AY) 2024-25. The list of foreign assets includes:
- Bank accounts
- Immovable properties
- Financial interests in entities or businesses
- Custodial accounts
- Equity and debt interests
- Trusts (as trustee, beneficiary, or settlor)
- Capital assets
Even if the taxpayer’s income is below the taxable limit or the foreign asset was acquired from disclosed sources, filling out the Foreign Asset (FA) or Foreign Source Income (FSI) schedule in the ITR is mandatory.
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Hefty Penalty for Non-Compliance
Taxpayers who fail to disclose foreign assets or income in their ITR could face a penalty of Rs 10 lakh under the anti-black money law. The advisory is part of a compliance and awareness campaign launched by the department to encourage complete and accurate tax reporting.
Awareness Campaign Details
The Central Board of Direct Taxes (CBDT), the administrative arm of the Income Tax Department, has rolled out an informational campaign targeting taxpayers. As part of this initiative:
- SMS and emails will be sent to taxpayers identified through international agreements, which suggest potential ownership of foreign assets or income from overseas jurisdictions.
- The communication aims to remind taxpayers to complete the foreign asset schedules in their ITR, particularly for cases involving high-value foreign assets.
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Deadline for Filing and Revising ITR
The CBDT emphasized that the last date to file a belated or revised ITR for AY 2024-25 is December 31, 2024. Taxpayers are advised to ensure their returns include accurate disclosures of foreign assets and income to avoid penalties.
Encouragement for Voluntary Compliance
The advisory seeks to promote voluntary compliance and transparency among taxpayers, ensuring that foreign income and assets are appropriately accounted for in tax filings. It also underscores the department’s efforts to uphold accountability in the global financial ecosystem by leveraging bilateral and multilateral information-sharing agreements.
Taxpayers are urged to review their financial records and consult tax professionals if necessary to ensure compliance with the law.
(With agency inputs)
