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IT Department Urges Taxpayers to Disclose Foreign Assets: What You Must Know
The Income Tax Department has initiated a fresh compliance drive urging taxpayers to voluntarily disclose any foreign assets or overseas income that may have been missed in their Income-Tax Returns (ITRs).
This comes after detailed information on offshore holdings was received through global reporting frameworks such as CRS (Common Reporting Standard) and FATCA.
If you or your clients hold any form of overseas assets, this update is extremely important.
Why the Department is taking action now:-
Indian residents must mandatorily report all foreign assets and foreign-source income in Schedule FA and Schedule FSI of their ITR. However, data received from foreign jurisdictions has revealed cases of non- disclosure or under- reporting.
To address this, the IT Department has identified over 25,000 high-risk taxpayers whose returns appear inconsistent with foreign asset information available with the authorities. These individuals will receive SMS and e-mail alerts, urging them to re-check their filings for potential discrepancies.
The “Last Chance” to Revise Returns:-
Taxpayers flagged under this campaign have been given a final opportunity to file a revised ITR and make full disclosures.
Key Points:
. Alerts are being sent to taxpayers where foreign assets or income may have been missed in ITRs.
. The window to revise the return and correct disclosures remains open only for a limited duration.
. Revised returns must accurately declare:
- Overseas bank accounts
- Foreign investments
- Shares, mutual funds, ESOPs
- Real estate abroad
- Foreign-source income such as interest, dividends, salary, rent, capital gains, etc.
The initiative follows a similar compliance drive earlier, where nearly 24,678 taxpayers revised their returns, disclosing significant foreign assets and income.
The message from the Department is clear: non- disclosure risks penalty and scrutiny.
Why accurate disclosure matters:-
Failure to report foreign assets is a serious compliance issue and may attract consequences under:
- Income Tax Act, 1961
- Black Money (Undisclosed Foreign Income and Assets) Act, 2015
Penalties can be steep and may include:
- Tax and penalty on undisclosed income
- Additional penalties for inaccurate reporting
- Potential prosecution in extreme cases
With global data exchange strengthening every year, non-reporting is likely to be detected sooner or later.
What you should do now:-
If you are a taxpayer:
. Review past ITRs - especially if you had foreign income or investments.
. Ensure Schedule FA and FSI are correctly filled.
. If you receive an alert, act immediately and revise your ITR within the allowed time.
. Even if you haven’t received a notice, voluntarily correcting any omission is always safer.
If you are a tax advisor or consultant:
. Inform your clients proactively about this initiative.
. Revisit clients’ disclosures and prepare corrected filings if required.
. Maintain documentation supporting foreign asset declarations.
. Use this window to strengthen overall compliance and avoid future disputes.
The IT Department’s nudge isn’t just a notice - it is a precautionary opportunity for taxpayers to come clean before stricter enforcement begins.
With international information sharing becoming more robust, accurate disclosure of foreign assets is no longer optional.
If you have overseas investments or income, now is the time to verify, revise, and comply. Transparency today can prevent penalties tomorrow.