Tag: Foreign Assets

CBDT’s Foreign Assets Disclosure Scheme: Key FAQs Explained

Central Board of Direct Taxes (CBDT) has notified the Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) Rules, 2026.

As part of its continued efforts to enhance taxpayer awareness and facilitate a better understanding of The Foreign Assets of Small Taxpayers Disclosure Scheme & Rules, 2026 CBDT has issued a comprehensive FAQ document on the scheme and rules.

The FAQs provide clear and concise explanations of the for the benefit of taxpayers and other stakeholders.

The FAQ document can be accessed here:

FAQ

The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (Chapter IV, sections 130 to 144 of the Finance Act, 2026, read with the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026)

A: About the Scheme

Q1. What is the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026?

Ans: It is a one-time voluntary disclosure scheme contained in Chapter IV (sections 130 to 144) of the Finance Act, 2026. It enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee.

Q2. What does the Scheme commence?

Ans: The Scheme comes into force on 16th August, 2026.

Q3. What is the “last date” for filing a declaration?

Ans: The last date has been fixed as 31st December, 2026. No declaration can be filed after this date.

Q4. What is the “valuation date” for the Scheme?

Ans: The valuation date is 31st March, 2026. The fair market value of assets proposed to be declared must be computed as on this date.

Q5. Which income-tax authority administers declarations under the Scheme?

Ans: The “income-tax authority” for the purposes of the Scheme is the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be. The entire process will be done online.

B : Who Can Make a Declaration (Eligibility)

Q6. Who is the “assessee” eligible to declare under the Scheme?

Ans: An “assessee” eligible under the scheme is one —

1. who is resident in India, (as per section 6 of the Income-tax Act, 1961), in the relevant previous year; or

2. who is a non-resident, or resident but not ordinarily resident (RNOR), [as per section 6(6) of the Income-tax Act, 1961], in the relevant previous year, but was resident in India either-

  • A:in the previous year to which the undisclosed foreign income under section 4 of the Black Money Act, 2015 relates, or
  • B: in the previous year in which the undisclosed asset located outside India was acquired.

Q7. Can a person who is presently a non-resident still make a declaration?

Ans: Yes, a person being a non-resident but was resident in India either

  • in the year to which the undisclosed income relates; or
  • in the year in which the undisclosed asset was acquired can make a declaration.

Q8. Is RNOR (Resident but Not Ordinarily Resident) status relevant?

Ans: Yes. The definition of “assessee” specifically covers non-resident and RNOR persons who meet the residency conditions noted above. The declarant can state his residential status for the previous year of acquisition of the asset or earning of the income in Form 1.

Q9. On what grounds can a declaration be made? Ans: A declaration may be made where the assessee —

  • has failed to furnish a return under section 139 of the Income-tax Act, 1961; or
    • has failed to disclose the asset or income in a return furnished before the Scheme commenced; or
    • such asset or income has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961.

Q10. Within what time-window must the declaration be filed?

Ans: On or after the date of commencement of the Scheme, but on or before the last date (i.e., between 16th August 2026 and 31st December, 2026).

Q11. Can a declaration be made for any previous year?

Ans: Yes, a declaration can be made for any previous year in respect of income or assets covered by the Table in section 133, subject to the monetary thresholds and other conditions of the Scheme.

C: What Can Be Declared — Scope of the declaration

Q12. What are the categories of declaration recognised under the Scheme?

Ans: There are two broad categories of declaration —

  1. an undisclosed asset located outside India or undisclosed foreign income which was not offered to tax. [Section 133 – Table: Sl. No. 1]
  2. an asset located outside India, which was already offered to tax or was acquired when the assessee was a non-resident, but not declared in the relevant Schedule of the return. [Section 133 – Table: Sl. No. 2]

Q13. What does “undisclosed asset located outside India” mean?

Ans: An asset (including a financial interest in any entity) located outside India, held by the assessee in his own name or in respect of which he is the beneficial owner, where he has no explanation about the source of investment, or the explanation given is, in the opinion of the Assessing Officer, unsatisfactory.

Q14. What does “undisclosed foreign income” mean?

Ans: The total amount of income of an assessee from a source located outside India, which was chargeable to tax in India but which has not been offered to tax.

Q15. What is the monetary threshold for a declaration under Section 133 – (Table: Sl. No. 1)?

Ans: The aggregate value of the undisclosed asset located outside India (as on 31st March, 2026) and the undisclosed foreign income must not exceed ₹1 crore.

Q16. What is the monetary threshold for a declaration under Section 133 – (Table: Sl. No. 2)?

Ans: The aggregate value of the assets located outside India must not exceed ₹5 crore.

D: Amount Payable

Q17. What is the amount payable for a declaration under Section 133 – (Table: Sl. No. 1)?

Ans: The total amount payable would be the aggregate of –

  • tax of 30% of the value of the undisclosed asset located outside India or 30% of the undisclosed foreign income declared; and
    • amount equal to the tax paid in (i)

Q18. Please explain this with an example?

Ans: Where an undisclosed foreign bank account is valued at ₹60 lakh and undisclosed foreign income is ₹20 lakh, the aggregate payable is Rs 48 Lakh as given below

Si.NoDescriptionValue/IncomeTax payableAdditional                     100% of tax payableTOTAL Amount payable
1Foreign bank account60 Lakh18 Lakh18 Lakh36 Lakh
2Foreign income20 Lakh6 Lakh6 Lakh12 Lakh
 TOTAL 24 Lakh24 Lakh48 Lakh

Q19. What is the amount payable for a declaration under Section 133 – (Table: Sl. No. 2)?

Ans: A flat fee of ₹1 lakh, provided the aggregate value of the assets located outside India does not exceed ₹5 crore.

Q.20 What is the amount payable if the aggregate value of the assets located outside India is Rs 6.5 Cr?

Ans: If the value of the assets is more than Rs 5 Cr, the assessee will not be eligible to avail the scheme.

E: Valuation of Assets (Rule 3)

Q21. What is the general approach for computing fair market value (FMV)?

Ans: As a general rule, FMV is the higher of

  • the cost of acquisition, and
  • the price the asset would ordinarily fetch if sold in the open market on the valuation date, ideally supported by a report from a valuer recognised by the government (or its agency) of the country where the asset is located.

Where such market valuation is not carried out, the indexed cost of acquisition is deemed to be the fair market value.

Q22. How is FMV computed for bullion, jewellery or precious stones?

Ans: FMV is the higher of the cost of acquisition and its open-market price on the valuation date (supported by a recognised valuer’s report); if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

Q23. How is FMV computed for archaeological collections, paintings, sculptures or other artistic works?

Ans: FMV is the higher of the cost of acquisition and its open-market price on the valuation date (supported by a recognised valuer’s report); if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

Q24. How is FMV computed for quoted shares and securities?

Ans: FMV is the higher of the cost of acquisition and the average of the lowest and highest price quoted on an established securities market on the valuation date;

Q.25 In case there is no trading of quoted shares and securities on the valuation date, how is the FMV calculated?

Ans: In case of no trading on valuation date, the FMV is the average of the lowest and highest price on the nearest preceding date on which the shares/securities were traded.

Q26. How is FMV computed for unquoted equity shares?

Ans: FMV is the higher of the cost of acquisition and the value computed by a prescribed formula based on the book value of specified assets, the fair market value of bullion, jewellery, shares, securities and immovable property, liabilities (excluding specified items such as paid-up capital and reserves), and the paid-up value of the equity shares. If this valuation is not carried out, indexed cost of acquisition is deemed to be the FMV.

Q27. How is FMV computed for unquoted shares/securities other than equity shares?

Ans: FMV is the higher of cost of acquisition and the open-market price (the price that the share or securities would ordinarily fetch if sold on the open market) on the valuation date, supported by a recognised valuer’s report; if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

Q28. How is FMV computed for immovable property located outside India?

Ans: FMV is the higher of the cost of acquisition and the open-market price on the valuation date, as per a valuation report from a valuer recognised by the government (or its agency) of the country where the property is located; if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

Q29. How is FMV computed for a foreign bank account?

Ans: The value shall be the sum of all deposits made into the account from the date it was opened up to the valuation date. However, certain exclusions are allowed.

  • where the account (or a part of it) was earlier declared under Chapter VI of the Black Money Act, 2015, and tax and penalty were charged on the value so computed, only deposits made since the date of that earlier declaration are aggregated.
  • deposits made out of the proceeds of a withdrawal from the same account are also excluded, to avoid double counting.

Q30. Please explain this with an example.

Ans: Yes. An assessee had opened a foreign bank account (BA) in 2010. The following deposits and withdrawals were made in BA since then. Assuming that the withdrawals made were late re-deposited into the BA, the value of the asset shall be calculated as follows.

DateDepositsWithdrawalsCalculation     of value of asset
01.04.2010$ 1,000–$ 1,000
01.06.2011$ 500–$ 500
01.08.2011–$ 700–
01.04.2012$ 500––
01.08.2013$ 500–$ 300
01.04.2019$2,500–$ 2,500
01.06.2020–$ 400–
01.09.2021$ 1,000–$ 600
01.05.2024–$ 500–
 TOTAL $ 4,900

The value of this asset i.e $ 4,900 will be converted into Rupees as on 31.03.2026 for the purpose of valuation under these Rules.

Q31. Please explain this with an example if the account was already declared under Chapter VI of the Black Money Act, 2015.

Ans: If the above taxpayer in Q.30 had declared the taxassistant deposits made in the above account under Chapter VI of the Black Money Act, 2015, the value of the asset shall be the sum of the deposits made since such date. In that case, the value of the asset shall be calculated as follows, assuming that the withdrawals made were late re-deposited into the BA.

DateDepositsWithdrawalsCalculation     of value of asset
01.04.2019$2,500–$ 2,500
01.06.2020–$ 400–
01.09.2021$ 1,000–$ 600
01.05.2024–$ 500–
 TOTAL $ 3,100

The value of this asset i.e $ 3,100 will be converted into Rupees as on 31.03.2026 for the purpose of valuation under these Rules.

Q32. How is FMV computed for an interest in a foreign partnership firm, association of persons, or LLP?

Ans: The value of an interest is calculated in the following steps

  • The net assets of the firm/AOP/LLP are first determined as on the valuation date.
  • The portion of net assets equal to the capital contributed is allocated among partners/members in the ratio of capital contribution;
  • The residual net assets are allocated as per the partnership/association agreement for distribution on dissolution, or, in its absence, in the profit-sharing ratio.

Q33. How is FMV computed for residuary assets (where an explicit valuation method is not provided)?

Ans: FMV is the higher of its cost of acquisition/amount invested and the price it would fetch if sold in the open market on the valuation date in an arm’s-length transaction; if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

Q34. What if sale proceeds of one asset, or a withdrawal from a bank account, were used to acquire another asset?

Ans: To prevent the same value being counted twice, the FMV of the old asset (or the bank account, as the case may be) is reduced by the amount reinvested in the new asset.

For example, where a house property was sold and the proceeds deposited in a bank account, and part of that account was later used to buy another property, the FMV of the bank account is reduced by the amount invested in the new property, while the new property is separately valued at its own FMV.

Q35. In what currency is value to be reported, and how is foreign currency converted?

Ans: All values are to be reported in Indian Rupees. For conversion of foreign currency:-

  • Where the currency in which the value is expressed is one of the currencies designated by the Reserve Bank of India under the Foreign Exchange Management (Deposit) Regulations, 2016, it is converted into Indian Rupees at the RBI’s reference rate on the valuation date.
  • If it is not such a designated currency, it is first converted into US Dollars at the rate specified by the central bank (or, failing that, another regulated bank) of the country where the asset is located, and the US Dollar value is then converted into Indian Rupees at the RBI reference rate on the valuation date.

Q36. Will my declaration be treated as invalid merely because the value declared differs from the value later determined by the Assessing Officer?

Ans: For assets other than a bank account, a variance not exceeding 20% of the fair market value declared will not, by itself, render the declaration invalid or void on the ground of misrepresentation, suppression of facts, or furnishing of false particulars. [Rule 5(2)]

F: How to File a Declaration (Form 1)

Q37. How and where is the declaration to be filed?

Ans: The declaration is to be filed in Form 1 electronically, to the prescribed income-tax authority.

Q38. Can I declare more than one asset, or more than one type of asset/income, in a single Form 1?

Ans: Yes. The relevant parts of Form 1 (and its Annexure) provide for the entries to be repeated as many times as required for multiple assets or income items.

Q39. Do I need to attach supporting documents or valuation reports?

Ans: Yes. Form 1 requires upload of documents evidencing acquisition of the asset or earning of the income, and, a valuation report where valuation is carried out (e.g., immovable property, jewellery, artistic work, unquoted shares and securities, or any other asset),

G: Processing of the Declaration — Orders and Payment (Forms 2, 3 and 4)

Q40. What happens after I submit Form 1?

Ans: After electronic verification of the declaration in Form 1, the income-tax authority communicates the amount payable by way of an order in Form 2, within one month from the end of the month in which the declaration was made. This is also communicated electronically.

Q41. Within what time must I pay the amount determined in the order in Form 2?

Ans: The amount must be paid within two months from the end of the month in which the order is received.

Q42. If I am unable to pay within this two-month period, will I be ineligible for this scheme?

Ans: No, the amount may be paid within a further period not exceeding two months along with simple interest at 1% for every month or part of a month of delay.

Q43. What is the interest payable if the payment is delayed?

Ans: The delayed payment is allowed for a further period of up to two months with simple interest at 1% for every month or part of a month of delay, computed on the amount due.

Q44. Is there an outer time-limit for making the payment, beyond which the Scheme benefit is lost?

Ans: Yes. The maximum additional period allowed is four months from the end of the month in which the original payment order (Form 2) was passed. If payment is not made within this outer limit, the benefit of the Scheme ceases to be available for that declaration.

Q45. How do I report that I have made the payment?

Ans: The payment is to be reported by furnishing an intimation of payment, together with proof of payment (including interest, if any), electronically in Form 3, to the income-tax authority, within the period allowed for payment.

Q46. What is the confirmation issued after the payment is done?

Ans: Once the intimation in Form 3 is found to be in accordance with the Form 2 order, the income-tax authority issues an order certifying the payment, electronically in Form 4, within one month from the end of the month in which the intimation was received.

H: Effect of a Valid Declaration — Benefits and Immunities

Q47. Can I claim rectification, revision or relief in respect of income/assets already assessed, once I have declared under the Scheme?

Ans: No. In respect of the income or asset declared, or any amount paid, the declarant cannot claim rectification or revision of any assessment already made under the Income-tax Act, 1961 or the Black Money Act, 2015, nor claim any set-off or relief in any appeal, reference or other proceeding relating to such assessment.

Q48. What is the immunity provided on making a valid declaration and payment?

Ans: Immunity is provided from the levy of any further tax or penalty, and from prosecution, under the Black Money Act, 2015, in respect of the income or asset so declared. Further, the income or amount of investment in the asset declared under this scheme shall not be included in the total income of the taxpayer under the Income-tax Act, 1961 or the Black Money Act, 2015.

Q49. If assessment proceedings for the relevant year are already pending when I file my declaration, how is that dealt with?

Ans: Where assessment proceedings under the Income-tax Act, 1961, or the Black Money Act, 2015, are pending in respect of the declared income or asset, the Assessing Officer is required to take the declaration into account while finalising the assessment order.

I: Where the Scheme Does Not Apply

Q50. In what situations is the Scheme not available at all?

Ans: The Scheme does not apply in respect of —

  • any income or asset which directly or indirectly represents proceeds of crime in respect of which proceedings have been initiated, or are pending, under the Prevention of Money-laundering Act, 2002; or
  • any income or asset relating to an assessment year for which assessment proceedings have already been completed under the Black Money Act, 2015.

Over 30,000 Taxpayers Report Foreign Assets Worth ₹30,300 Crore Following Nudge Campaign

Nudge Campaign Leads to Significant Increase in Taxpayer Disclosures: Finance Minister

In a recent statement, Finance Minister Nirmala Sitharaman announced that over 30,000 taxpayers have revised their income tax returns (ITRs) or filed belated returns, subsequently declaring additional foreign assets and income totaling approximately ₹30,300 crore. This initiative was part of a ‘nudge’ campaign aimed at encouraging taxpayers to voluntarily disclose their foreign income and assets.

During her address in the Lok Sabha regarding the Finance Bill 2025, Sitharaman explained that targeted communication was employed to prompt these disclosures. SMS and E-mails were sent to around 19,501 select taxpayers, urging them to review their Income Tax Returns filed for the 2024-25 assessment year, based on information available to the Income Tax department concerning foreign deposits,” she remarked.

The outcomes of the campaign were noteworthy. Out of the targeted group of 19,501 taxpayers, a significant 11,162 chose to revise their returns and complete the Schedule Foreign Assets Form. Collectively, these taxpayers reported total foreign assets valued at ₹11,259.29 crore and disclosed foreign income amounting to ₹154.42 crore.

Moreover, Sitharaman highlighted that 883 taxpayers amended their ITRs, correcting their residency status from resident to non-resident in the revised return for the 2024-25 assessment year. She noted that this outreach had a consequential ‘ripple effect’ on tax compliance.

As a result of the campaign, an additional 13,516 taxpayers reported foreign assets worth ₹7,564 crore and foreign income close to ₹353 crore in their revised ITRs for the same assessment year. Cumulatively, the nudge campaign resulted in total disclosures of foreign assets amounting to ₹29,208 crore and foreign income of ₹1,089 crore (approximately ₹30,297 crore) in Schedule FA (foreign assets) by a total of 30,161 taxpayers.

Sitharaman concluded that the nudge campaign regarding properties and assets held abroad has proven successful. Tax assessees have not only disclosed their foreign properties but have also settled the corresponding tax liabilities.

Over 30,000 Taxpayers Report Foreign Assets Valued at ₹29,200 Crores in FY25

A Surge in Voluntary Foreign Asset Declarations in India

In 2024, Income Tax officials reported that 30,161 taxpayers declared foreign assets valued at Rs 29,208 crores, along with additional foreign income of Rs 1,089.88 crores. This marks a considerable rise in voluntary foreign asset disclosures, increasing from 60,000 in Assessment Year (AY) 2021-22 to 2,31,452 in AY 2024-25. This growth is significant, reflecting a 45.17% increase from the previous assessment year, as indicated by government sources to Business Today.

International Collaboration for Financial Transparency

In September 2024, India received substantial financial information from more than 108 countries under the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) agreements. The Central Board of Direct Taxes (CBDT) actively engaged with 19,501 taxpayers via SMS and emails, alongside conducting 30 outreach sessions that saw participation from over 8,500 individuals throughout the year.

By the end of 2024, 24,678 taxpayers reviewed their Income Tax Returns (ITRs), with 5,483 filing belated returns and 6,734 updating their residential status to properly declare their foreign assets. The Income Tax Department alerted taxpayers to voluntarily disclose any previously unreported foreign assets or income by December 31, 2024, warning that non-compliance could lead to severe penalties, including fines of up to Rs 10 lakh or imprisonment in certain situations.

Government’s Stance on Foreign Asset Disclosure

The Income Tax Department has reiterated that India receives detailed information about its residents’ financial accounts held in foreign jurisdictions, rendering attempts to hide wealth abroad ineffective. The exchange of information regarding Indian individuals with foreign assets or income operates under an international framework, facilitated by CRS and FATCA.

CRS, an initiative by the Organization for Economic Cooperation and Development (OECD), mandates financial institutions to report information on financial accounts held by foreign residents to their respective tax jurisdictions. This data is exchanged annually among jurisdictions. Similarly, FATCA, implemented by the United States, requires foreign financial institutions to report information regarding accounts held by U.S. taxpayers to the Internal Revenue Service (IRS).

Guidelines for Declaring Foreign Assets

Schedule FA
The Income Tax Department urges taxpayers to be proactive in reporting any foreign assets or income by disclosing them in Schedule FA (Foreign Assets) in the ITR form and in Schedule FSI (Foreign Source Income). Additionally, taxpayers may claim Tax Relief on taxes paid abroad by filing Schedule TR (Tax Relief). Non-disclosure of foreign assets and income can attract severe penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Filing ITR-U
Taxpayers misreporting foreign income or assets face considerable challenges, especially given the existing data access of tax authorities. It is advisable to address these discrepancies promptly by submitting a revised or belated Income Tax Return (ITR) or an updated ITR-U. However, not all individuals are eligible to make corrections via ITR-U. If the deadline for ITR filing, revised ITR, or belated ITR has passed for prior financial years, only an ITR-U can be filed to rectify under-reported or unreported income, but new disclosures must be accomplished through the standard ITR or revised ITR.

Black Money Act
Experts note that individuals wishing to voluntarily disclose foreign income or assets but unable to do so via revised ITR, belated ITR, or ITR-U may utilize the Black Money Act. This legislation allows taxpayers to disclose undisclosed foreign assets and income, potentially minimizing penalties and the risk of prosecution. It’s crucial to disclose proactively before the tax department identifies non-compliance through enforcement measures or international data-sharing protocols like FATCA and CRS.

Conclusion

As India strengthens its framework for foreign asset disclosure, taxpayers must be aware of their obligations and the consequences of non-compliance. With the increasing scrutiny on foreign assets, taking prompt action to disclose these assets can prevent significant penalties and potential legal issues in the future.

Avoid Rs 10 lakh income tax penalty from income tax department

India’s tax department has clarified reporting rules for foreign income and assets. Non-disclosure invites penalties under the Black Money Act, including a potential Rs 10 lakh fine and legal action.

The enactment of the Black Money law has introduced severe penalties for taxpayers who provide insufficient disclosures regarding their foreign incomes, assets, and related information. Non-compliance now constitutes a violation of both income tax and black money regulations, resulting in dual legal consequences for individuals who fail to report their foreign income and assets within the stipulated timeframes.

Many taxpayers remain uncertain about the mandatory reporting requirements for foreign assets and income. To address this uncertainty, the Income Tax Department issued a brochure on December 11, 2024, clarifying which taxpayers must submit Schedule Foreign Assets (FA) and additional documentation in their Income Tax Return (ITR) by December 31, 2024, if not previously completed.

In my experience, I found many salaried-class taxpayers land in trouble unwittingly by not disclosing their foreign bank accounts opened during their on-site assignments abroad or shares received as Employee Stock Options (ESOP) during their employment with multinational companies. Non-disclosure of foreign accounts by resident taxpayers in the relevant schedule of ITR can trigger the initiation of penalties by the Tax Department,” said Ramakrishnan Srinivasan, former Chief Commissioner of Income Tax, as quoted by ET. The release of this e-brochure by the Income Tax Department goes a long way in creating awareness among taxpayers of their mandatory disclosure obligations beyond returning correct income.

Who Should Disclose Foreign Assets/Income?

All Indian residents with overseas income or assets are required to make declarations. The definition of residency encompasses individuals who have stayed in India for 182 days or more in any previous year, or those who have spent 365 days or more across four preceding years plus 60 days in the previous year.

The guidelines specify that Hindu Undivided Family (HUF), Firms, or Associations of Persons are considered resident entities unless their management and control operate entirely outside India. Additionally, Indian companies or those with effective management based in India fall under this category.

What is the Penalty for Non-Disclosure of Foreign Income and Assets?

Failing to disclose foreign income and assets can trigger serious legal consequences. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, authorizes the initiation of assessment proceedings against defaulters.

A monetary penalty of ₹10 lakh is applicable when the combined value of assets (excluding immovable property) surpasses ₹20 lakh in these situations:

  • Non-submission of income tax returns by individuals holding foreign assets and income, as stipulated in Section 42 of the Black Money Act, 2015.
  • Failure to provide information or providing incorrect details about assets (including financial interests in entities) situated outside India in the income tax return, according to Section 42 of the Black Money Act, 2015.

Legal prosecution can also be initiated under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

What is Defined as Foreign Income and Assets?

Foreign assets encompass bank accounts, equity and debt interests, business investments, property holdings, capital assets, and beneficial interests in overseas holdings. Income from foreign sources includes interest earnings, dividends, gross proceeds, redemption amounts, and other related earnings.

How to Disclose Foreign Income and Assets?

Declarations must be submitted using appropriate ITR forms, excluding ITR-1 and ITR-4, based on individual circumstances. It’s important to note that ITR-1 and ITR-4 do not contain Schedule FA, Schedule FSI, and Schedule TR sections.

Disclosure must be made in the Income Tax Return for the Assessment Year when the taxpayer holds resident status in India during the previous year. The applicable return of income should be submitted before the specified due date according to Section 139(9) of the Income Tax Act, 1961.

Location for Foreign Asset Disclosure in ITR

  • Schedule FA: For furnishing details of foreign assets and income from any source outside India.
  • Schedule FSI: For furnishing details of income from outside India and tax relief.
  • Schedule TR: For providing details of the summary of tax relief claimed for taxes paid outside India.

Gather comprehensive information about foreign assets, including asset type, country location, address details, acquisition date, and generated income. Compile information about all foreign income sources, including income type, earned amounts, country of origin, and taxes paid internationally.

Input the required information in appropriate schedules by following the detailed instructions available on income tax.gov.in. If eligible under the Double Tax Avoidance Agreement, submit Form 67 alongside Schedule TR to claim tax benefits.