The Income Tax Department has issued a warning about a Rs 10 lakh fine for taxpayers who fail to disclose foreign assets or income in their income tax returns (ITR). This penalty is under the anti-black money law and serves as a reminder, with the deadline for filing late or revised ITRs approaching on December 31.
Consultation Paper on Compliance and Awareness
On Saturday, the department released a consultation paper as part of its Compliance-cum-Awareness campaign. Taxpayers are advised to provide accurate information in their ITR for the assessment year 2024-25, ensuring that no details are concealed.
Key Information on Foreign Assets and Income
The consultation paper highlights that Indian tax residents must disclose certain foreign assets and income. These include:
- Foreign bank accounts
- Cash value insurance contracts
- Financial interests in foreign businesses
- Immovable properties abroad
- Equity and loan interests
- Trusts where the person is a trustee or beneficiary
- Any capital gain assets held internationally
How Information Will Be Collected
The Central Board of Direct Taxes (CBDT) will begin its campaign by sending SMS and email reminders to taxpayers who have filed their ITR for the 2024-25 assessment year. This communication will be based on data collected through bilateral and multilateral agreements.
Mandatory Disclosure of Foreign Assets and Income
The Income Tax Department stressed that taxpayers with foreign assets or income must fill out the Foreign Assets (FA) or Foreign Source Income (FSI) schedule in their ITR. Failing to do so, even if the foreign assets are from declared sources or the income is below taxable limits, could result in a Rs 10 lakh penalty under the Black Money and Tax Imposition Act, 2015.
