Deadline Alert: Report Foreign Income and Assets by December 31, 2024, to Avoid Heavy Penalties!

Are you an Indian taxpayer with overseas income or assets? If yes, you’ve got an important deadline coming up. December 31, 2024, is the last date to report your foreign income and assets in your Income Tax Return (ITR). Missing this deadline could lead to a massive penalty of Rs 10 lakh under the Black Money Act. Let’s break this down so you can stay compliant and penalty-free. Why Foreign Income and Asset Reporting Deadline Matters

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, imposes strict penalties for non-disclosure. This includes failing to report foreign income, assets, or financial interests in your ITR. Besides the hefty Rs 10 lakh penalty, non-compliance could lead to severe legal consequences like prosecution.

Take a moment to reflect. Have you worked abroad, received ESOPs from multinational companies, or maintained overseas bank accounts? These are just some examples of foreign assets that must be reported.

To make things easier for taxpayers, the Income Tax Department recently issued a detailed e-brochure (on December 11, 2024) clarifying what must be reported. If you’re confused, don’t worry — this guide is here to help.

Get professional assistance for filing Form 67 and claiming a foreign tax credit.

What Counts as Foreign Income and Assets?

It’s essential to understand what qualifies as “foreign assets” and “foreign income.” Here’s a quick rundown:

Foreign Assets Include:

• Bank accounts held outside India

• Investments in foreign equity, debt, or real estate

• Business interests in other countries

• Beneficial ownership in overseas entities
  

Foreign Income Includes:

• Interest earned on foreign bank accounts

• Dividends from shares held overseas

• Proceeds from the sale of foreign assets

• Income from foreign real estate rentals
  

Simply put, if you’ve got money, property, or investments outside India, you need to disclose them.

How to Report Foreign Income and Assets in Your ITR

It’s not as complicated as it sounds. Follow these steps to ensure you’re compliant:

1. Choose the Right ITR Form: Avoid using ITR-1 or ITR-4. Opt for forms that include Schedules FA, FSI, and TR.

2. Fill Schedule FA: Use this section to disclose details of all foreign assets and any income derived from them.

3. Fill Schedule FSI: Report income earned outside India and claim tax relief for taxes paid abroad.

4. Fill Schedule TR: Provide a summary of tax relief claimed.

5. Submit on Time: File your ITR before December 31, 2024, to avoid penalties. Procrastination could cost you dearly!
   

Need help? We provide expert assistance in filing Form 67 for claiming a foreign tax credit.  Learn more about our services.

What Happens if You Don’t Comply with the Foreign Income and Asset Reporting Deadline?

Non-compliance is not an option! Here’s what you’re looking at if you fail to report your foreign income and assets:

• Hefty Penalty: A fine of Rs 10 lakh if the value of foreign assets exceeds Rs 20 lakh.

• Legal Trouble: Prosecution under the Black Money Act for incorrect or incomplete disclosures.