Taxpayers warn: Revise ITR to Show FA/Face 10 Lakh Penalty

Taxpayers warns: Revise ITR to Show Foreign Assets or Face 10 Lakh Penalty

Income Tax Dept has initiated a Compliance-Cum-Awareness Campaign aimed at ensuring that taxpayers accurately disclose foreign assets and income in their Income Tax Returns for Assessment Year 2024-25. Details about the CBDT Compliance-Cum Awareness Campaign are available here under:

• CBDT initiated Targeted SMS & email reminders are being sent to taxpayers, especially those linked with high-value foreign assets.

• FSI & FA mandatory disclosure: All resident taxpayers are required to report foreign assets and foreign source income in their ITR, even if:
  • Their income is below the taxable threshold.
  • The foreign assets or income are acquired from disclosed sources.
• Taxpayers must review and file their updated ITR in case they omitted to file Schedule FA and Schedule FSI earlier. The taxpayer must check whether Schedule FA and Schedule FSI in the previously submitted ITR are complete and accurate. If omitted, file a revised or belated ITR before December 31, 2024.
• Income Taxpayers can file revised or belated ITRs by December 31, 2024, to correct omissions or errors in reporting foreign assets.
• Penalty for Non-Compliance for non-reporting of foreign assets & foreign source income in their ITR:
• Failure to disclose foreign assets or income may attract a penalty of INR 10 lakh under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
• This applies even if:
  • The asset was acquired with legal funds.
  • The taxpayer’s income is non-taxable.
• Foreign Asset means: Under the Black Money Act, foreign assets for Indian residents include:

• • Bank Accounts: Accounts held outside India.
  • Custodial Accounts: accounts holding financial securities or assets abroad.
  • Financial Interests: shares, bonds, or partnerships in overseas entities.
  • Immovable Property: Real estate located outside India.
  • Trusts and Beneficiary Interests: acting as a trustee or beneficiary of a trust abroad.
  • Other Assets: Insurance policies, annuity contracts, and other capital assets overseas.
  • Foreign Income: Earnings from investments, employment, or other sources abroad.
  • CBDT Compliance-Cum-Awareness Campaign, Taxpayers flagged for potential non-disclosure have been identified using data obtained under bilateral and multilateral agreements through the Automatic Exchange of Information framework.

PAN Category-wise ITR Filing during last five years