What are Foreign Assets?

How Can I Declare a Foreign Asset in Income Tax?

According to the Income Tax Act, 1961, the following must report foreign assets. 
 

• Beneficial owners: if you have any financial assets in a foreign country, or a signing authority of any foreign bank account, then you need to report them on your Income tax returns. 
• Resident Individuals and HUFs: Indian taxpayers who are resident and ordinarily resident should mention their foreign income and assets in the ITR. It must include details of your foreign bank account and the signing authority of the accounts held in foreign countries. 
• Beneficiaries for Foreign Assets: If you have any foreign assets outside India, and the income generated is not included in your ITR, then you need to file an ITR and mention all your foreign assets. 

The importance of foreign assets is: 
 

• Legal compliance: According to the Black Money Act, 2015, it is important to mention all the foreign assets and income. It means you need to mention your Income tax return, like Schedule FA for mentioning foreign assets, such as real estate, bank accounts, foreign source of Income, like capital gains from foreign sources, interests, and dividends. 
• Avoid Penalties: If you haven't disclosed your foreign assets in the ITR, then it will result in a penalty of INR 10 lakhs. 
• DTAA benefits and Tax Credits: Giving correct information helps the taxpayer to claim the taxes that he or she paid in a foreign country and get the benefits of the Double Taxation Avoidance agreement.