When filing your income tax return (ITR), you should declare the income that accrues in India and the income that grows abroad.
The income Tax department on the X platform posted that you are meant to fill the foreign asset schedule as a resident income taxpayer if you own an asset abroad or have a foreign income. Put simply, if you own foreign assets or hold bank accounts abroad, you must complete the foreign asset schedule in your income tax return (ITR).
So, you are supposed to fill the foreign asset (FA) schedule in your tax return if only one of the following conditions are being met:
A. You were a tax resident of India the previous year.
B. If you own foreign assets or bank accounts.
C. If you have earned foreign income during the previous year.
Foreign assets include foreign bank accounts, foreign cash value insurance contracts or annuity contracts, financial interest in any entity/ business, immovable property, foreign custodial account, foreign equity and debt interest, trusts outside India in which you are a trustee, beneficiary or settlor, account in which you have signing authority, any other capital asset and any other foreign assets as held in Schedule FA.
Other conditions
It is pertinent to note that a resident in India must fill the foreign asset schedule for the foreign asset/accounts held at any time during the calendar year 2023, even if:
A. You do not have any taxable income, or your income falls within the basic exemption limit.
B. The same information is captured in any other schedule
C. The foreign asset is created/acquired from disclosed foreign or domestic income sources.
The last date to file an income tax return (ITR) is July 31, 2024.
₹10 lakh penalty
The Income Tax department also highlighted that the failure to disclose a foreign asset/income in the ITR can attract a penalty of ₹10 lakh under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 despite the acquisition of foreign asset out of disclosed income.