New Delhi (India), November 24 (ANI): The Central Board of Direct Taxes (CBDT) has advised all taxpayers to carefully examine their foreign income and assets and declare them accurately in their Income Tax Return (ITR). .

During the session, Shashi Bhushan Shukla, Commissioner (Investigation), CBDT, explained that all Indian residents are required to declare their foreign assets, which may include immovable property, bank accounts, shares, debentures, insurance policies or any other financial assets for which they are the beneficial owner.

He said the Income Tax Department has provided a detailed step-by-step guide in the ITR form, especially in the ‘Foreign Assets and Income’ table, where taxpayers can declare their foreign income and assets.

He emphasized that this rule applies specifically to resident taxpayers, as defined in section 6 of the Income Tax Act.

Defining resident taxpayers, Shukla clarified that a resident taxpayer is a person who has lived in India for at least 182 days in the preceding year or has stayed in India for 365 days in the preceding four years. Taxpayers who do not meet these criteria are either considered non-residents or ordinarily non-residents, and they are not required to report their foreign income and assets.

He added that only resident taxpayers need to declare their foreign income and assets in their ITR.

The discussion turned to the common confusion regarding taxpayers who own foreign assets but do not earn income from them.

Shukla explained that even if a resident taxpayer owns a foreign asset, such as a property purchased years ago, which does not generate income, he must still report it in his ITR, regardless of the absence of income rental or interest.

He gave the example of a person who bought a property abroad in 2010 but made no income from it. Even in this case, as long as the individual is a resident, he is obliged to declare this property.

Responding to the situation where a taxpayer holds foreign assets, such as an investment property or an overseas bank account, but the income generated from these assets is below the taxable limit, Shukla confirmed that any resident taxpayer owning foreign assets must declare them, regardless of the country. amount of revenue generated. Failure to declare foreign assets or income can result in penalties under the Black Money Act, including fines of up to Rs 10 lakh.

Talking about returning non-resident Indians (NRIs) who owned foreign assets while living abroad, he said even if such people return to India and become residents, they have to disclose their foreign assets and income to the years they are considered residents. .

The same rule applies to any foreign citizen who becomes resident in India, according to Shukla. The obligation to disclose foreign assets applies to both residents and those who achieve resident status.

Regarding disclosure of foreign shares and investments, he informed that all dividends or capital gains derived from such foreign shares must be declared in the ITR as per the appropriate schedule.

Shukla also touched on the subject of Double Taxation Avoidance Agreements (DTAA), which India has signed with various countries. These agreements ensure that taxpayers do not end up paying taxes twice on the same income. If foreign taxes have already been deducted on income earned abroad, Indian taxpayers can claim tax credit under DTAA to avoid double taxation, it added.

Shukla further highlighted the growing importance of international tax transparency and information exchange. India has signed the Common Reporting Standard (CRS) agreement with over 120 countries to ensure that information on foreign assets and income is shared between countries for tax purposes. This exchange of financial information helps combat tax evasion and improve compliance, he added. (ANI)

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