Disclosure of Foreign Income & Assets
In an era of global mobility and digital income, many Indian residents earn or hold assets abroad. But with this comes an important responsibility — accurate disclosure of foreign income and foreign assets in your Income Tax Return (ITR). Failing to do so can lead to serious penalties under the Black Money Act.
Who Needs to Disclose Foreign Income?
If you are a Resident and Ordinarily Resident (ROR) in India, you must report and pay tax on your global income:
- Salary earned abroad
- Foreign interest income (e.g., NRO/NRE accounts)
- Dividends or capital gains from foreign shares
- Rent from foreign properties
- Income from foreign clients
- Crypto/digital asset income from foreign exchanges
What Needs to Be Disclosed?
| Asset Type | Details to be Furnished |
|---|---|
| Bank Accounts (outside India) | Country, bank name, account number, peak balance |
| Financial Interests | Shares, insurance, pension funds, etc. |
| Immovable Property | Address, ownership %, acquisition date |
| Foreign Trusts/Companies | Nature of interest (beneficiary/shareholder) |
| Signing Authority | Even if only a signatory, not an owner |
Common Scenarios Where People Miss Disclosure
- Salaried employees who worked abroad for part of the year
- NRIs who returned to India but still hold foreign accounts
- Freelancers receiving foreign payments (e.g., PayPal)
- Students receiving foreign remittances/scholarships
- Crypto traders using Binance, Coinbase, etc.
Penalties for Non-Disclosure
| Offense | Penalty |
|---|---|
| Failure to disclose foreign asset | ₹10,00,000 per asset |
| Undisclosed foreign income | Prosecution + tax + interest + penalty |
| Reopening of past assessments | Up to 16 years |
Steps Before Filing ITR
- Identify foreign assets/income to report
- Choose correct ITR form (ITR-2 or ITR-3)
- Fill Schedule FA and foreign income sections
- Use Form 67 for claiming DTAA benefit
- Double-check for errors to avoid notices
Final Word
If you have global income or overseas assets, don’t wait till the last day. Early tax planning and accurate reporting ensures compliance and peace of mind.
Be transparent. Be compliant.
