The Income Tax Department has warned taxpayers that it is mandatory to disclose foreign income and assets by December 31, 2024. Failure to do so may result in heavy fines and strict action under the Black Money Act. However, this information is not required to be given to every Indian.

This information will have to be given to those Indians who have stayed in India for 182 days or more in the last year. Indians who have stayed in India for a total of 365 days in the last 4 years will also have to give this information. Those who will have to give this information include those people - who have foreign bank accounts, shares, business stakes, real estate, and other assets. Also, those who have received interest, dividends, capital gains, and other earnings through assets abroad will have to disclose.

Which form to fill?

Taxpayers will have to fill Schedule FA (Foreign Assets), Schedule FSI (Foreign Income), and Schedule TR (Tax Relief) in the respective forms of ITR. Note, ITR-1 and ITR-4 cannot be used for these disclosures. If taxpayers have already filed income tax returns but have not disclosed foreign income or assets in them, they will have to file a revised return by December 31.

Penalty provision
If the total value of foreign assets is more than ₹20 lakh (excluding immovable property) and is not disclosed, a penalty of up to ₹10 lakh can be imposed. Apart from this, providing false or incomplete information can also lead to prosecution under the Black Money Act.

Why is disclosure necessary?

Disclosure of foreign income and assets not only ensures compliance with Indian tax laws but also helps avoid double taxation under international tax treaties.

How to disclose foreign income and assets?

Review all your foreign assets and income such as bank accounts, investments, and income sources.

Use forms like ITR-2 or ITR-3, in which schedules FA, FSI, and TR are available.

Fill in details of assets in Schedule FA, income in Schedule FSI, and international tax relief in Schedule TR.

Include details of your acquisition of assets, income earned from them, and taxes paid abroad.

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