failure-to-disclose-overseas-income-in-itr-can-cost-10-lakh

The Income-Tax Department warned taxpayers on Sunday that failing to disclose assets held abroad or income received on foreign lands in the ITR could result in a Rs 10 lakh penalty under the anti-black money statute.

 

The deadline to file a belated and updated ITR is December 31.

 

The department issued a public advisory as part of a compliance-and-awareness campaign launched on Saturday to ensure that such information is disclosed by the assessee on their Income Tax Return (ITR) for the assessment year (AY) 2024-25.

 

The advisory stated that a 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 account, equity and debt interest, trusts in which a person is a trustee, beneficiary  of settlor, accounts with singing authority, any capital asset etc., held abroad.

 

The government stated that taxpayers who meet these criterion "must mandatorily" fill out 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 was "acquired from disclosed sources."

 

"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," according to the advise.

 

The Central Board of Direct Taxes (CBDT), the tax department's administrative body, announced that as part of the campaign, it will send "informational" SMS and email to resident taxpayers who have already submitted their ITR for AY 2024-25.

 

The notification will be issued to those who have been "identified" using information acquired under bilateral and multilateral agreements "suggesting" that they may have overseas accounts or assets, or have received income from foreign jurisdictions.

 

The campaign's goal is to recall and guide those who may not have fully completed the schedule of foreign assets in their ITR (AY 2024-25), particularly in cases involving high-value foreign assets, according to the CBDT.