ITR Filing and Disclosure of Foreign Bank Accounts, Assets & Income: All You Need to Know

Foreign bank account holders, individuals with foreign assets, and those earning foreign income are required by the Income Tax Department to disclose this information while submitting their Income Tax Returns (ITRs) in the Schedule FA for the Assessment yea 2023-24. As the deadline for ITR filing approaches, it is important not to overlook the obligation of disclosing these details.

In accordance with the Income Tax Act, the resident taxpayers are obliged to disclose their foreign assets in the ITR if they possess specified foreign assets at any point during the entire financial year.

A tax resident of India in the previous year, and Own foreign assets or bank accounts. Or Have earned foreign income during the previous year shall disclose the foreign assets.

The department has specifically mentioned that a  resident in India must fill foreign

asset schedule, for the foreign assets held as on December 2022 even if:

1. You do not have any taxable income or your income falls within basic exemption limit
2. Same information is captured in any other schedule (like schedule AL)
3. The Foreign Asset is created/acquired from disclosed sources of foreign or domestic income

Foreign Assets Includes:

1. Foreign Bank Accounts
2. Foreign Equity and debt
3. Financial interest in any Entity/Business
4. Immovable property
5. Any other capital asset
6. Any other foreign assets in Schedule FA.

The taxpayer also required to disclose if you have:

1. Foreign Custodial Account
2. Foreign cash value insurance contract or annuity contract
3. Account(s) signing authority
4. A name as a trustee-beneficiary or settlor in trusts, outside India

Penalty

According to the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, individuals who do not disclose such information may be subjected to a penalty of Rs. 10 Lakhs.

Additionally, the Income Tax Department has granted an exemption to NRIs from linking their PAN with Aadhaar if they have already updated their NRI status with the department. If you have not yet informed the income tax department about your NRI status, it is advised to do so without delay.

Read More: PAN-Aadhaar Link: Income Tax Dept issues clarification on Inoperation of PAN of NRIs/OCIs

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates