Failure to disclose foreign assets, income to invite ₹10 lakh penalty: I-T dept

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The Income-Tax Department on Sunday (November 17, 2024) cautioned taxpayers that failure to disclose assets held abroad or income earned in foreign shores in the ITR can attract a penalty of ₹10 lakh under the anti-black money law.

Also Read: I-T Dept. has served notices in over 400 cases under anti-black money law

The department issued a public advisory as part of a compliance-cum-awareness campaign launched recently by it on Saturday (November 16, 2024) 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 account, 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.

The 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.”

“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 Central Board of Direct Taxes (CBDT), the administrative body for the tax department, had said that as part of the campaign it will send “informational” SMS and email to those resident taxpayers who have already filed their ITR for AY 2024-25.

The communication will be sent to such persons who have been “identified” through information received under bilateral and multi-lateral agreements “suggesting” that these individuals may hold foreign accounts or assets, or have received income from foreign jurisdictions.

The purpose of the campaign is to remind and guide those who may not have fully completed schedule foreign assets in their submitted ITR (AY 2024-25), especially in cases involving high-value foreign assets, the CBDT had said.

The last date to file a belated and revised ITR is December 31.