The Income Tax Department has warned taxpayers that failing to disclose foreign income or assets located abroad in their Income Tax Returns (ITR) could attract a penalty of ₹10 lakh under the Black Money (Undisclosed Foreign Income and Assets) Act.
What Does This Mean?
- Indian tax residents must disclose details of:
- Foreign bank accounts.
- Insurance policies or annuity contracts with cash value.
- Financial interests in entities or businesses abroad.
- Immovable property located outside India.
- Custodial accounts, equity or debt interests, and trusts.
- Capital assets held overseas.
Notices for Non-Compliance
- The Central Board of Direct Taxes (CBDT) has announced that it will send notifications, SMS, and emails to taxpayers who have already filed their ITR for the assessment year 2024-25 but have not disclosed such information.
- This includes individuals who are trustees, beneficiaries, or settlors of foreign trusts or hold signatory authority over accounts abroad.
Why Is This Important?
- Non-disclosure of foreign income or assets is a serious violation and could result in hefty penalties.
- Transparency in declaring global income ensures compliance with tax laws and avoids legal complications.
Key Takeaway
If you have foreign income or assets, make sure to report them in your ITR to avoid penalties. The government is actively monitoring such cases, and early compliance can save you from unnecessary troubles
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