Last Chance to Correct Your ITR: Disclose Foreign Assets and Income

The Income Tax Department recently held an online interaction session, Samvaad, on November 24, 2024, to discuss the crucial topic of disclosure of foreign assets and income by taxpayers. The session emphasized the legal obligations of Indian residents to declare their foreign assets, income, and financial interests while filing their Income Tax Return (ITR).

If you missed reporting such assets or income in your original ITR for the Assessment Year (A.Y.) 2024-25, the clock is ticking to correct it. The revised return can be filed only until December 31, 2024, making this your final opportunity to ensure full compliance.

What Must Be Declared?

Indian residents are legally required to declare the following foreign assets, irrespective of their income:

Real Estate: Properties held outside India.
Bank Accounts: Foreign bank accounts, even if they have minimal balances.
Investments: Shares, debentures, and other financial instruments in foreign entities.
Insurance Policies: Policies held with foreign insurance companies.
Other Financial Assets: Any asset where the taxpayer is the beneficial owner.

The Risks of Non-Disclosure

Failing to report foreign assets or income can attract stringent penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015:

Fines up to ₹10 lakh for non-disclosure.
Potential scrutiny and prosecution by tax authorities.

How to Correct Your ITR

If you have missed reporting any foreign income or assets, you can correct this by filing a revised return under Section 139(5) of the Income Tax Act. Here's how to do it:

Log in to the Income Tax e-filing portal.
Choose the option to file a revised return.
Select the appropriate ITR form and A.Y. 2024-25.
Accurately report all foreign assets and income.
Verify and submit the revised return.

Key Deadline: December 31, 2024

The revised return for A.Y. 2024-25 can only be filed up to December 31, 2024. Ensure that any errors, omissions, or non-disclosures, especially those related to foreign assets, are rectified within this window.

Why Act Now?

Avoid Penalties: Timely correction can save you from heavy fines and legal actions.
Ensure Compliance: Reporting foreign assets aligns with the government's transparency and anti-black money initiatives.
Secure Peace of Mind: A clean and accurate ITR strengthens your financial credibility.

Take Action Before It’s Too Late

The Income Tax Department’s Samvaad session served as a timely reminder of the responsibilities taxpayers hold in reporting their global income and assets. Use this opportunity to review your ITR and make necessary corrections to stay on the right side of the law.

Remember, accurate tax filings are not just a legal obligation but a step toward ethical financial management. Don't delay—file your revised return before December 31, 2024.