Do You Own Foreign Assets In Your Portfolio? Learn How To File Schedule FA In ITR To Disclose All Your Assets And Save Yourself From Fines.

Taxpayers must declare all their foreign assets or any foreign source income under schedule FA while ITR filing before the due date.

Income Tax Return filing

Taxpayers must declare all their foreign assets or any foreign source income under schedule FA while ITR filing before the due date. 

Income Tax Return filing (ITR filing) due date is approaching soon. All taxpayers must disclose their foreign assets in ITR filing. Declaring foreign assets and income will help you save taxes. The foreign assets disclosure in ITR can be done in Table A3 under Schedule of Foreign Assets (FA) using ITR 2 or ITR 3.

To file Schedule FA in ITR, identify the categorisation of your foreign assets and then find its code. Fill in the essential information, investment, and income details. Disclose foreign assets in ITR.  

  • If you hold any foreign assets (bank deposits, equities, Foreign MF, insurances, custodial accounts, and real estate properties held outside India), disclose them in Schedule FA in ITR. 
  • Fill in all the necessary details, and add DTAA relief (if any) to maximise tax savings. 
  • If foreign assets disclosure in ITR is not done, you will have to pay the amount of Rs 10 lakh as a penalty or get imprisonment of 7 years. 

Also Read: Avoid non-disclosure of income while filing ITR. 

What are the steps to file Schedule FA in ITR ?

Let's have a look at the detailed steps of how to fill schedule FA in ITR. 

1. Identify your FA category

Know the category and code of the foreign assets you hold. Select the relevant foreign assets and its code from the drop-down menu. 

2. Fill in all basic details

Provide all the essential details of your Foreign assets, like name, country, address, zip code, currency code, etc. 

3. Provide all important investment details

Fill in the FA initial value, opening and closing balance, and the highest balance at the end of the accounting period. These values should be converted into Indian Rupees.

4. Fill in income details 

Provide details of your income or revenue you earned in that accounting year. You can also provide proceeds from the sale of any assets. 

5. Add details of any relief (optional) 

You can add Double Taxation Avoidance Agreement (DTAA) relief details earned from foreign assets investment (if any). 

Is there any penalty for non-disclosure of foreign assets? 

Suppose you do not make foreign assets disclosure in ITR filing or even manipulate information, you will have to pay a penalty of Rs. 10 lakhs per year or even face imprisonment for up to seven years. Moreover, for not declaring foreign assets and income, you will be revoked from the right to claim relief under DTAA for your foreign income. 

Also Read: Know why foreign investments are becoming expensive. 

Therefore, avoiding tax evasion and maximising your tax saving by filing the correct ITR is essential. However, if you have FA acquired between January to March 2023, you are not required to disclose your FA investment in the current ITR filing. 

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