Not disclosing foreign shares, investments, assets in your ITR can lead to penalty of Rs 10 lakh
Black Money Act, 2015.
As per The Times of India report, a Mumbai Income Tax Appellate Tribunal (ITAT) levied a penalty of Rs 10 lakh for each year where foreign shares and other assets were not reported in the 'Schedule FA' of the ITR on the individual.
An individual is mandatorily required to fill schedule FA of the ITR if they had invested in foreign assets (such as foreign shares, foreign company mutual funds etc.) directly or have held employee stock options (ESOPs) of foreign companies.
«Section 43 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 requires a resident individual to provide information of his foreign assets located outside India in the ITR. If he fails to do so the Assessing Officer may levy a straight penalty of Rs 10 lakh on such person.
It is essential to understand that section 43 mandates the disclosure of foreign assets in 'Schedule FA' in the relevant ITR form. Simply reporting income from foreign assets in the ITR form without disclosing the assets in Schedule FA will not be considered as fulfilling the disclosure requirement,» says Naveen Wadhwa, chartered accountant and Vice President, Taxmann.
«If an individual has purchased virtual digital assets (VDAs) from international exchanges and also storing them in foreign wallets then they have to file schedule VDA and Schedule FA both,» says CA Anand Bathiya, Vice President-Bombay Chartered Accountants' Society (BCAS).
However, an individual investing in an Indian- origin scheme which has a foreign investment mandate like Indian mutual funds investing in US, Taiwan, etc., then schedule FA is not required to be filed.
