Unveiling the Hidden: Tax Department's Crackdown on Undisclosed Foreign Assets

The Income-Tax Department has warned taxpayers that failing to report foreign assets or income in their ITRs can result in a Rs 10 lakh penalty under the anti-black money law. A new compliance campaign urges transparency in asset reporting for the assessment year 2024-25.

The Income-Tax Department has issued a stern warning to taxpayers about the repercussions of failing to disclose foreign holdings or earnings within their income tax returns (ITRs). The department states that non-compliance can lead to a hefty penalty of Rs 10 lakh under anti-black money legislation.

This public advisory comes on the heels of a compliance and awareness initiative that commenced on Saturday, aiming to ensure that taxpayers include all relevant information regarding foreign assets in their ITR for the assessment year 2024-25. Tax residents are urged to report foreign-held assets, such as bank accounts, insurance contracts, and financial interests, regardless of income levels or source of funding.

The Central Board of Direct Taxes (CBDT) has announced that informational communications will be directed to taxpayers identified through international agreements. These messages will prompt individuals to accurately complete the schedule for foreign assets, particularly if their ITRs for the current assessment year contain unspecified high-value foreign assets.

(With inputs from agencies.)