Income Tax Department Warns of ₹10 Lakh Penalty for Undisclosed Foreign Asset
The Income Tax (I-T) Department has launched a compliance and awareness campaign urging taxpayers to disclose any foreign assets or income earned from abroad in their Income Tax Return (ITR) for the assessment year 2024-25.
Failure to comply could result in a hefty penalty of ₹10 lakh under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Foreign Assets Definition
The advisory defines foreign assets for Indian residents as including:
- Bank accounts held abroad
- Financial interest in entities or businesses
- Immovable property or custodial accounts
- Trusts (as trustees, beneficiaries, or settlors)
- Any capital assets, equity, or debt interest held overseas
Even taxpayers whose income is below the taxable limit or who acquired foreign assets from disclosed sources must mandatorily complete the Foreign Asset (FA) or Foreign Source Income (FSI) schedule in their ITR.
Awareness Campaign
To promote compliance, the Central Board of Direct Taxes (CBDT) will send SMS and email alerts to taxpayers identified through information-sharing agreements with foreign jurisdictions. These communications aim to guide individuals who may have omitted details of high-value foreign assets or income in their ITR.
“The purpose of the campaign is to remind and guide those who may not have fully completed schedule foreign assets in their submitted ITR (AY 2024-25),” said the CBDT.
Deadline for Compliance
Taxpayers can still file a belated or revised ITR by December 31, 2024, to ensure compliance and avoid penalties. The department stresses the importance of accurate reporting, particularly for individuals flagged through international data-sharing agreements.
This initiative aligns with the government’s ongoing efforts to curb tax evasion and undisclosed foreign income under the Anti-Black Money Law.
