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Incometax implications of foreign salary held in canada bank

AM (service) (25 Points)

16 February 2017

I have worked in Canada since Jun 2014 to Jul 2015 and received salary in Canadian Dollar. I have paid the tax there after providing my international income for the financial year and submitted ITR-1 after coming back to India (for my income in India for April & May 2014). I didn't see any provision of declaring the dollars I own in Canadian Account in ITR-1. However, I have declared the same through my wife's declaration as a part of "Lokpal" (my wife is a Govt Employee & needs to declare her and her spouse's all assets & liabilities). Is everything alright from my perspective or I have missed anything within the process? If so, anything that I can do now in order to rectify? Since I do not see any chance of going back to Canada again, is it alright if I simply transfer those Canadian Dollars back to India now?

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7 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160322 Points)
Replied 16 February 2017

You should revise your return to ITR 2 where you have to show your foreign income and assts.

manoj (student) (5205 Points)
Replied 16 February 2017

You should revise the return

if cant then write to A.O. about this

AM (service) (25 Points)
Replied 17 February 2017

Thank you for your responses.

But, I am unsure about the possibilities of revising the ITR filings I have already done for the assessment years 2015-16 and 2016-17, because both of them are already processed by the IT department. Can I do the same for the coming AY (2017-18)? Will there be any problem if I file ITR-2 for AY 2017-18?

Regarding writing the A.O. can you please guide me the process and the implications? Are they going to charge me anything saying that I havn't declared it in last two years (even though I have declared it through the "Lokpal" declaration for my wife).

Is it something like my hard earned tax payed money turned out as black money just because of my ignorance of the right ITR form?

Rohit Gupta (3 Points)
Replied 17 February 2017

Well if you declare income of past year now

Then as far as tax implications is concerned

AO will consider the interest on the tax amount of the past income declared

You'll have to pay the interest

Explanation can also be given when AO sends a notice to you for enquiry

A logical explanation is always acceptable at the department.

raghavan (self) (611 Points)
Replied 19 February 2017

u have to revise your return to include Canada interest income for July 2015 to mar 16 even if it is already assessed. contact so and he will help u in int calculation for the delay and pls do this before march 17. get professional help if u need. all the best.

Abhinav (CA) (397 Points)
Replied 20 February 2017

I assume you left for Canada in FY 2014-15 for employment and your stay in India for that year was less than 182 days - in that case, you qualified to be a non-resident for that year. No requirement for a non-resident to declare foreign assets/income in Indian tax return, so no issues there.

For FY 2015-16, I asssume you to be a Resident and Ordinarily Resident (ROR) - note that exact determination depends on the exact days of stay in India) - in that case, if you had any foreign asset/income - even a single USD/CAD and you've not disclosed- you are at fault. Note that Black Money Act came in effect w.e.f. 01/07/2015 which prescribes not only a flat INR 10 lacs penalty but also prosecution which may extend upto 10 years.

You still have time to revise the return (if you had filed original returns well within time). In the revised return, you can disclose the foreign assets and income and pay applicable tax. Note that you can revise your return even if it is processed u/s 143 (1).

P.S. - Friendly advice: Yours is a sensitive matter since it has implications w.r.t. Black Money Act. please consult a local CA with detailed facts & then take a decision.

AM (service) (25 Points)
Replied 22 February 2017

Thank you very much Abhinav.....

Yes, for FY 2014-15 (AY 2015-16) , I did file ITR-1 and I remember, I have selected my status as NRI (since my stay in India for that FY was well less than 180 days). And, for FY 2014-15 (AY 2015-16) , I did file ITR-1 as regular (Resident of India).

So, according to you, I am in the defaulter list for last FY (FY 2014-15) only, not for the previous one...and still I have option to revise that return to ITR-2. Can you please tell me how can I do that, since it has already been processed. Also, if you can let me know the last date for this revision, is it 31-Mar-2017?