Tax Talk: Declare foreign assets in your ITR

financialexpress.com:

AS PER Section 139 of the Income Tax Act, 1961 (ITA), individuals are mandatorily required to file an income tax return if they hold, as a beneficial owner or otherwise, any asset (including any financial interest in any entity) located outside India. It also includes those having signing authority in any account located outside India, or are beneficiaries of any asset (including any financial interest in any entity) located outside India.

This requirement applies even if the taxpayer’s income is below Rs 2.5 lakh, the minimum amount not chargeable to tax. However, it is a little-known fact that individuals meeting this condition should not file ITR 1 but ITR 2 or ITR 3, as applicable.

Prevent tax evasion
Schedule FA was introduced in the income tax return for AY 2012-13 to prevent tax evasion through offshore routes, providing taxpayers an opportunity to disclose offshore assets and income upfront. The Schedule requires the disclosure of details of foreign depository accounts, details of foreign custodial accounts, details of foreign equity and debt interest, details of immovable property (land and building) situated outside India, etc. This schedule is only applicable to residents, and non-residents, including residents who are not ordinarily resident (RNOR), are exempt from reporting this. All the specified details of foreign assets and income must be disclosed in Schedule FA, along with references to the relevant schedule in the ITR where such taxable income is declared. If you have invested in shares outside India, you must also reference the corresponding dividend income, if any.

ITR filing for AY 2024-25
Unlike the information in the ITR, which pertains to the period between April and March, details of foreign