New Delhi. The Income Tax Department has warned taxpayers that it is mandatory to disclose foreign income and assets by 31 December 2024. If this is not done, taxpayers may face heavy fines and strict action under the Black Money Act. However, this information is not required to be given to every Indian.

This information will have to be given by those Indians who have stayed in India for 182 days or more in the last one year. Indians who have stayed in India for a total of 365 days in the last 4 years will also have to give this information. Those who will have to give this information include those who have foreign bank accounts, shares, business stakes, immovable property and other assets. Also, those who have received interest, dividends, capital gains and other income through assets located abroad will also have to disclose.

Which form to fill?
Taxpayers need to fill Schedule FA (Foreign Assets), Schedule FSI (Foreign Income), and Schedule TR (Tax Relief) in the respective forms of ITR. Note, ITR-1 and ITR-4 cannot be used for these disclosures. If taxpayers have already filed income tax returns but have not disclosed foreign income or assets in it, they need to file a revised return by December 31.

Penalty provision:
If the total value of foreign assets is more than ₹20 lakh (excluding immovable property) and is not disclosed, a penalty of up to ₹10 lakh can be imposed. Apart from this, a case can also be filed under the Black Money Act for giving false or incomplete information.

Why is disclosure important?
Disclosure of foreign income and assets not only ensures compliance with Indian tax laws but also helps avoid double taxation under international tax treaties.

How to disclose foreign income and assets?
Review all your foreign assets and income such as bank accounts, investments and income sources.
Use forms such as ITR-2 or ITR-3, which have Schedules FA, FSI and TR available.
Fill in the details of assets in Schedule FA, income in Schedule FSI, and international tax relief in Schedule TR.
Include information on your acquisition of assets, income earned from them, and taxes paid abroad.