New Delhi – The Income Tax Department has issued a stern warning to taxpayers regarding the non-disclosure of foreign assets and income in their Income Tax Returns (ITR), stating that such omissions can lead to a hefty penalty of up to Rs 10 lakh under the anti-black money legislation. In a public advisory released on Sunday as part of a new compliance and awareness campaign, the department emphasized the importance of accurately reporting foreign assets for the assessment year (AY) 2024-25. This initiative aims to educate taxpayers about their obligations and the consequences of failure to comply. According to the advisory, a foreign asset for Indian tax residents encompasses a variety of holdings, including bank accounts, cash value insurance contracts, annuity contracts, financial interests in businesses, immovable properties, custodial accounts, equity and debt interests, and any capital assets located abroad.
Taxpayers are required to fill out the foreign asset (FA) or foreign source income (FSI) schedule in their ITR, even if their income remains below the taxable threshold or if the foreign 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,” the advisory clearly stated. The Central Board of Direct Taxes (CBDT), which oversees the tax department, revealed that the campaign will include sending out informational SMS and emails to resident taxpayers who have already filed their ITR for AY 2024-25.
These communications are aimed at individuals identified through bilateral and multilateral agreements, indicating possible holdings of foreign accounts or assets, as well as income from overseas sources. The campaign serves as a reminder for taxpayers to meticulously complete the foreign assets schedule in their ITR, particularly for those with high-value foreign assets. The CBDT urges taxpayers to take this warning seriously to avoid potential penalties. Taxpayers are reminded that the last date to file any belated or revised ITR is December 31, which adds urgency to ensure that all foreign assets and income are accurately reported.
