Declaration of Foreign Assets and Income.

By | October 17, 2025
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Declaration of Foreign Assets and Income.

Any resident of India who has foreign income or assets must disclose them, even if their total income is below the taxable limit.

Who is a Resident Indian?

  • Individuals: An individual is considered a resident if they have stayed in India for 182 days or more in a previous year, or for 365 days or more in the four preceding years and 60 days or more in the previous year.
  • HUFs, Firms, and AOPs: These entities are considered residents unless the control and management of their affairs are situated entirely outside India.
  • Companies: An Indian company or a company with its effective place of management in India is considered a resident.

What to Disclose

You need to disclose both foreign assets and foreign income.

Foreign Assets

This includes a wide range of assets located outside India, such as: 

  • Foreign depository or custodial accounts
  • Bank accounts
  • Foreign equity and debt interests (including ESOPs)
  • Financial interest in any entity or business
  • Immovable property
  • Any other capital assets
  • Any account for which you have signing authority
  • Any trust created outside India in which you are a trustee, beneficiary, or settlor

Foreign Income

This includes income from sources outside India, such as: 

  • Salary
  • House property income
  • Business or professional income
  • Capital gains (long-term and short-term)
  • Interest, dividends, and royalties
  • Fees for technical services

How and Where to Disclose

You must disclose foreign assets and income in the appropriate schedules of your Income Tax Return (ITR).

  • ITR Forms: You must use an ITR form other than ITR-1 or ITR-4, as these do not have the required schedules. 
  • Schedules:
    • Schedule FA: For details of foreign assets and any income from them. 
    • Schedule FSI: For details of income from sources outside India and any tax relief claimed.
    • Schedule TR: For a summary of tax relief claimed for taxes paid outside India.
  • Double Taxation Avoidance Agreement (DTAA): If applicable, you can claim tax benefits under a DTAA by filling out Form 67 online in addition to Schedule TR. 

What to Do If You’ve Missed the Deadline or Made a Mistake

If you have not filed your return on time or have not declared your foreign assets and income, there are ways to correct this.

  • Late Filing: For AY 2025-26, you can file a belated return until December 31, 2025. You must declare your foreign assets and income even if your income is below the taxable limit.
  • Revising a Filed Return: If you have already filed your return but have not declared your foreign assets and income, you can revise your return before December 31, 2025. 13You will need to choose the correct ITR form if your original was ITR-1 or ITR-4 and fill in the necessary schedules.

Benefits of Disclosure

Accurate and complete disclosure of foreign assets and income has several benefits: 

  • It ensures compliance with the Black Money Act, 2015. 
  • It helps you avoid double taxation on income earned outside India. 
  • It prevents penalties and prosecution for non-disclosure under the Black Money Act. 

Consequences of Non-Disclosure

Failure to disclose foreign assets and income can lead to serious consequences under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. 

  • Assessment Proceedings: The department can initiate assessment proceedings against you. 
  • Penalty: A penalty of ₹10 lakh can be levied if you fail to furnish a return or provide inaccurate particulars about your foreign assets.
  • Prosecution: You can also face prosecution for non-filing or for furnishing inaccurate information.
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