Last date to file belated or revised return under Income tax Act is 31.12.2023 for AY 2023-24 i.e. FY 2022-23. Hence, this is the last time to declare any income or revise the already filed income tax return.
Normally, an individual is required to file Income tax return if his total income during the year under consideration exceeds Rs. 2.5 lakh. However, there are various exceptions to this under section 139 of the Act wherein income tax return is required to be filed even if total income does not exceeds the limit.
One such exception is holding of a foreign asset which could include foreign shares, securities, immovable property.
Currently we have seen how easy it has been become to invest in foreign shares and securities by the use of various applications available online.
Foreign assets could be in the form of:
1. Immovable property in foreign country.
2. Holding foreign bank account or being a signatory in foreign bank account.
3. Directly holding/ purchasing foreign shares or foreign shares received in form of ESOP/ RSU etc.
Hence, if a person holds any of the above foreign assets then he needs to compulsorily file income tax return irrespective of whether he has sold or purchased any foreign asset during the year. If a person holds foreign asset at any point of time during the year he needs to file income tax return.
The only reason as to why this could be the last time to disclose foreign asset if you haven’t done it already is Schedule foreign asset is only available in ITR 2 and 3. Hence, if you hold any foreign asset you need to either file ITR 2 or 3 which you can do right now by filing revised return.
In case of rectification it is very difficult to change the Income tax return hence it is advisable to file revised return now only if foreign asset is not already disclosed.
Further, if a person does not discloses foreign asset in it’s income tax return it could result in a penalty under Black Money Act of Rs. 1000000 for each year in which you have held foreign asset if the value of foreign asset is more than 5 lakh.
To read more about penalty Read the case law: Penalty of Rs.10 lakh per year for not disclosing foreign asset under Schedule FA in ITR [Read order] – Taxontips
Please note that foreign asset needs to be declared as per Calendar Year i.e. foreign asset held between January 2022 to December 2022 while filing Income tax return for FY 2022-23. [It is mentioned in the instructions of filing Income tax return.
Hurry!!! and disclose Foreign asset if you haven’t already.
Guidance on above article for Indian Income Tax by:
Naman Maloo (C.A., B.Com)
He is currently working as Partner – Direct Tax with a renowned firm in Jaipur having experience in dealing Assessments before Income Tax authority, Tax Audit, International Taxation, Tax planning for NRI, Business planning and consultation.
E-mail: naman.maloo@jainshrimal.in | LinkedIn: Naman Maloo
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