Non-reporting foreign shares and other foreign assets held by you in your income tax return (ITR) can be held liable for violating the Black Money Act, 2015. Its is mandatory for an individual 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.
In other words, all the foreign assets held by you either legally, as a beneficiary, or as a beneficial owner should be disclosed while filing the ITR 2 or ITR 3, as appropriate.
As per the Income Tax Act of 1961, residents and ordinarily resident Indians should report their foreign income, assets, accounts, and shares in the schedule FA in ITR in a given format, irrespective of whether the income is taxable in India or not. This schedule helps curb tax evasion through offshore routes.
In addition to the above, the resident can also avoid paying double tax on the same income by claiming relief under the DTAA (Double Taxation Avoidance Agreement). DTAA, or the double taxation avoidance agreement, is a type of agreement signed between two nations that ensures that the taxpayer does not have to pay taxes multiple times in different countries.
Irrespective of the slab rate applicable or income earned, you must file an ITR if you hold any foreign asset at any time in the financial year. If you need assistance filing your tax return with foreign Income, our team of online CAs is your best bet to reduce your overall tax liabilities.
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