The Income Tax Department has warned of a penalty of ₹10 lakh for concealing foreign assets. The department has issued notices in this regard. Strict action is being taken against cases of tax evasion. This step has been taken to encourage disclosure of foreign assets and ensure tax compliance.
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Income Tax: If you are filing your ITR, you will be required to provide all information related to your foreign property. The Income Tax Department has sent notices to taxpayers via messages and emails regarding this. The ITR, which must be filed by December 31st, will require you to provide information about foreign property, bank accounts, and other information. If you have received an email or message from the Income Tax Department, there is no need to panic.
The Income Tax Department has clarified that these messages are not for any action, but to alert taxpayers and provide them with an opportunity to voluntarily correct their information. According to Income Tax Department officials, these messages have been sent only in cases where there is a discrepancy between the information provided in the ITR and the data available with the department. This data is obtained from banks, investment institutions, and foreign tax agencies.
According to tax lawyer Ankit Gupta, these communications are advisory in nature, not investigations or actions. Their purpose is to inform taxpayers that the department has information about some of their transactions, so they can review their Annual Information Statement (AIS) and provide accurate information. Taxpayers should review their AIS statement and provide feedback on the compliance portal.
File a revised ITR if necessary. The deadline for filing a revised or belated ITR for 2025-26 is December 31st. Failure to disclose foreign assets or income could result in a penalty of up to ₹10 lakh under the Black Money Act. In serious cases, action may be taken. Such assets will be considered undisclosed foreign assets and taxed at up to 30 percent of their value.
Who received an Income Tax Notice?
The Income Tax Department has issued notices based on data collected from taxpayers who have not disclosed foreign assets such as bank accounts abroad, foreign shares, mutual funds, ESOPs or RSUS, properties abroad, crypto or digital assets in their ITRs. These taxpayers are required to disclose their foreign assets in their ITRs. They must provide information on land or flats outside India, foreign bank accounts (even if inactive), foreign insurance policies, foreign shares, mutual funds, etc.
Which ITR Form is Correct?
ITR-2 or ITR-3 are generally used to disclose foreign assets. ITR-1 or ITR-4 are not valid. If you receive a message or notice from the Income Tax Department, do not ignore it. Check the AIS, provide correct information, and correct your ITR in time to avoid future penalties.
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