Investing in foreign stocks? Here’s what you should disclose to Income Tax Dept to remain out of trouble

financialexpress.com:

Question: What disclosure requirements are required to be made by Indian investors at the time of furnishing of tax return where investments are made in foreign stocks? And, what are the relevant consequences if such disclosure requirements are not fulfilled?

Answer by Dr Suresh Surana, Founder, RSM India: Every Indian resident (and ordinarily resident) taxpayer who owns or has a beneficial interest in assets abroad or derives income from foreign sources is required to disclose in Schedule FA details of such foreign assets or accounts held or foreign income derived at any time during the relevant calendar year period.

In case of failure to furnish in the income tax return any information or for furnishing inaccurate relating to an asset (including financial interest in any entity) located outside India, held by a taxpayer (resident and ordinarily resident in India) as a beneficial owner or otherwise, or in respect of which he was a beneficiary, or relating to any income from a source located outside India, at any time during such relevant year, a penalty of Rs. 10 lakhs would be imposed u/s 43 of the Black Money (Undisclosed Foreign Income & Assets) & Imposition of Tax Act 2015.

It is pertinent to note that penalty under this section shall not apply in respect of an asset, being one or more bank accounts having an aggregate balance which does not exceed a value equivalent to Rs. 5,00,000 at any time during the relevant year.

Also Read: Income Tax Return: How money received via Will or Inheritance from abroad is taxed in India

Further, the provisions of Section 276C(1) of the Income-Tax Act, 1961 may be attracted leading to prosecution (subject to rigorous imprisonment for a period of 6 months to 7 years and/or fine), if