Income Tax: The Income Tax Department has launched a new campaign to remind taxpayers about the importance of disclosing property held abroad or income earned abroad in their income returns ( ITR ).
Launched on November 17, the campaign aims to raise awareness and ensure compliance under the anti-black money law. According to the Income Tax Department, taxpayers who fail to report such property or income may face a hefty penalty of Rs 10 lakh. The campaign is focused on Assessment Year (AY) 2024-25, and all eligible taxpayers are required to fill the foreign asset or foreign source income (FSI) schedule in their ITR. This rule applies even if the income is below the taxable limit or the foreign asset is acquired using disclosed funds.
What is foreign property? According to the advice of the Income Tax Department, foreign property includes:-
- Bank accounts or custodial accounts held abroad
- Financial interests in entities or businesses outside India
- Immovable properties, trusts or any capital assets located abroad
- Equity and Debt Investments
- Accounts where taxpayers have signing authority
- Cash value insurance or annuity contract
What did the Income Tax Department say?
The Income Tax Department has clarified that non-disclosure of foreign assets or income in ITR can attract a penalty under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015. The penalty can be up to Rs 10 lakh.
What does CBDT say ?
The Central Board of Direct Taxes (CBDT) oversees the Income Tax Department. It said that informational messages and emails will be sent to taxpayers who have already filed their ITR for AY 2024-25. These communications target individuals identified through bilateral and multilateral agreements that suggest they may have foreign assets or have received income from abroad. The CBDT explained in a statement that the campaign serves as a reminder and guidance to taxpayers who have not completed the foreign property schedule in their ITR, especially in cases involving significant foreign holdings.
Time limit for rectifying errors
Taxpayers have time till December 31, 2024 to file revised or delayed ITR if they need to correct any discrepancy. The campaign aims to ensure compliance and prevent inadvertent omissions in reporting foreign assets or income.
