Investors filing tax using LRS route must disclose foreign assets, income

Misreporting may invite penalty as high as Rs 10 lakh, can go up to 200 per cent of the tax due

In April 2025, $2.5 billion flowed out of India under the Liberalised Remittance Scheme (LRS), with investment-related remittances surging around 105 per cent year-on-year. As the mutual fund route for overseas investments is frequently unavailable, many investors are using the LRS route. Such investors must ensure they file their income tax return (ITR) accurately.

Choose the right ITR form and schedules

Resident investors holding foreign assets or earning income from foreign securities must file ITR-2 or ITR-3. “Use ITR-2 if you do not have income from business or profession and ITR-3 form if you have income from those sources,” says Poorva Prakash, partner,