New Delhi: The Income Tax department is keeping a close watch on taxpayers who failed to report any income earned from abroad in their ITR filing. Taxpayers may be penalised under the Black Money Act if they fail to disclose foreign income. The Income Tax department on December 11, 2024, clarified to taxpayers on how to declare scheduled foreign assets in their ITR.
The last date for the declaration of foreign assets to the Income Tax department is December 31, 2024. Some of the taxpayers who may incur such penalties unwittingly may include salaried individuals who opened an account during on-site assignments abroad, the ET reported, citing Former Income Tax chief commissioner R Srinivasan.
Who should declare foreign assets in ITR?
Ahead of the ITR Filing deadline of December 31, 2024, taxpayers must declare their foreign assets. This includes individuals who have stayed in India for 182 days or more in the previous year. The residency law also applies to those who may have spent 365 in the past 4 years or more and 60 days in India in the past year. A company or entity is considered a resident unless its management is based outside India.
Penalty for non-disclosure of foreign assets
The Income Tax department may impose a monetary penalty of Rs 10 lakh if the combined balue surpasses Rs 20 lakh in the event of non-reporting of foreign income in ITR, and providing incorrect details about foreign assets. Taxpayers may also be prosecuted under the Black Money Act and Imposition of Tax Act.
How to disclose foreign income and assets in ITR?
Taxpayers can disclose foreign assets using Schedule FA, Schedule FSI and Schedule TR. These sections are not available in forms ITR1 and ITR4. The relevant declarations must be made under section 139 (9) of the Income Tax Act. Schedule FA is sued to furnish details related to foreign assets and income from sources outside India. For tax relief and details of income outside India, taxpayers may use Schedule FSI. Summary of tax relief for tax claimed payment of taxes outside India can be claimed under Schedule TR.
ITR fine amount after Dec 31
If taxpayers fail to file their Income Tax return by December 31, 2024, they are likely to incur a Rs 5,000 fine. However, if they fail to file their ITR by December 31, 2024, the fine amount may rise to Rs 10,000 provided that it is filed by March 31, 2025.
Do you need to mention expensive gifts in ITR?
While filing their ITR, taxpayers must ensure that they report expensive gifts such as cash and gold. Taxpayers must also report if they were gifted real estate, paintings or other valuable items in the ITR. To be sure, taxpayers are not required to declare gifts valued below Rs 50,000.
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