Failure to disclose assets held abroad or income earned on foreign shores in the ITR can attract a penalty of Rs 10 lakh under the anti-black money law, the Income-Tax (I-T) Department cautioned taxpayers on Sunday.
The department issued a public advisory as part of a compliance-cum-awareness campaign launched recently by it on Saturday to ensure that such information is reported by the assessee in their Income Tax Return (ITR) for assessment year (AY) 2024-25.
The advisory specified that 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 accounts, 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.
“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 stated.
The I-T department said taxpayers figuring under this criteria must mandatorily fill 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 abroad was acquired from disclosed sources.
The Central Board of Direct Taxes (CBDT) has also launched a Compliance-Cum-Awareness Campaign for Assessment Year (AY) 2024-25 to assist taxpayers in accurately completing Schedule Foreign Assets (Schedule FA) and reporting income from foreign sources (Schedule FSI) in their income tax returns (ITR).
In a statement, CBDT said informational messages will be sent via SMS and email to resident taxpayers who have already submitted their ITRs for AY 2024-25.
These messages are intended for individuals identified through information received under bilateral and multilateral agreements, suggesting that they may hold foreign accounts or assets, or have received income from foreign jurisdictions.