New Delhi: Taxpayers failing to disclose assets held abroad or income earned on foreign shores in the Income Tax Return (ITR) can get a penalty of Rs 10 lakh under the anti-black money law, the Income Tax Department warned on Sunday.
As part of a compliance-cum-awareness campaign the department launched recently, it issued a public advisory on Saturday to ensure that the mentioned information is reported by the assessee in their ITR for the 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 contract or annuity contract, financial interest in any entity or business, immovable property, custodial account, equity and debt interest, trusts in which a person is a trustee, beneficiary or 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.