Deadline Alert: Avoid a ₹10 Lakh Penalty by Filing This Information Before December 31

The Income Tax Department has issued a stern warning for taxpayers regarding disclosure of foreign assets and income. Indian residents must ensure their Income Tax Returns (ITR) accurately reflect foreign holdings and income to avoid penalties as high as ₹10 lakh under the anti-black money law.

Who Needs to Act?

• Taxpayers who have filed ITR-1 or ITR-4 but possess foreign assets or earn foreign income must file revised or belated returns by December 31, 2024.
• The correct forms to use, based on your tax profile, are ITR-2 or ITR-3 to include the necessary disclosures in Schedule Foreign Assets (Schedule FA) and Schedule FSI (Foreign Source Income).

What Must Be Disclosed?

Foreign assets include:

• Real estate.
• Bank accounts.
• Shares and debentures.
• Employee stock options (ESOPs).
• Insurance policies or other financial instruments.

Compliance Campaign

To raise awareness, the department has launched a campaign for the assessment year 2024–25, emphasizing the need to correctly fill out these schedules. Filing incorrect or incomplete returns could lead to:

• Penalties: Up to ₹10 lakh.
• Prosecution: As per the anti-black money law.

Why This Matters

Filing accurate returns is not just about compliance; it safeguards taxpayers from hefty penalties and legal consequences. If you’ve inadvertently submitted the wrong ITR, revise your return immediately before the December 31 deadline.