Have money abroad? IT dept's new guide spells out what & how to report

CBDT's latest guide explains how resident Indians must disclose foreign income and assets in ITR this year, missed details can lead to penalties under the Black Money Act

To help taxpayers correctly report overseas income and assets, the Central Board of Direct Taxes (CBDT) has released a detailed guide explaining how to fill the foreign assets (FA), foreign source income (FSI), and tax relief (TR) schedules in the income tax return (ITR).

 

These steps align with international obligations under the Common Reporting Standard (CRS) and the US-led foreign account tax compliance act (FATCA), aimed at curbing offshore tax evasion.

 

Why CRS and FATCA matter

CRS, developed by the OECD, and FATCA, enacted by the United States, are global frameworks that require financial institutions across countries to share details of foreign financial accounts with respective tax authorities. India receives such data annually, covering account balances, interest income, and more, which helps the Income Tax department detect unreported foreign assets or income held by resident taxpayers.

 

What needs to be reported

Indian residents must declare:

 

• All foreign financial accounts and assets (under Schedule FA) 
• Income from any foreign source (under Schedule FSI) 
• Tax relief for taxes paid overseas (under Schedule TR and Form 67) 
• Failure to do so can trigger steep penalties under the Black Money Act, 2015.

 

How to file: A quick overview

Schedule FSI-reporting foreign income

 

-Mention income from outside India under the correct head (e.g., salary, capital gains).

 

-Use ISD codes for countries and provide TIN or passport details.

 

-Claim tax relief under the applicable Double Taxation Avoidance Agreement (DTAA) article.

 

-Ensure you also file Form 67 to claim credit.

 

Schedule TR- tax relief claimed

  -Summarise tax paid overseas (as reported in FSI) country-wise.

 

-Mention tax relief claimed under Sections 90, 90A or 91.

 

Schedule FA-foreign assets disclosure

 

Report all foreign assets held during the calendar year ending 31 December 2024, including:

 

-Depository, custodian and insurance accounts

 

-Foreign equities, immovable properties, trusts, and other capital assets

 

-Signing authority in any foreign account

 

Convert all amounts into Indian currency using SBI’s telegraphic transfer buying rate as on the relevant date.

 

Why this matters

Transparent and accurate foreign asset disclosure:

 

-Ensures legal compliance and avoids scrutiny

 

-Helps claim tax credits and avoid double taxation

 

-Reflects good governance and contributes to national development

 

Final word

 

The Income Tax department urges all resident taxpayers to disclose foreign assets and income fully and accurately in their ITRs. With automatic exchange of data under CRS and FATCA, concealment is riskier than ever. Timely and transparent disclosures are key to staying on the right side of the law.