Sahil Jaiswal
Quick Summary
The Indian government has taken a strong stance against non-disclosure of foreign income and assets, especially with the implementation of stringent provisions under the Income Tax Act and international agreements such as FATCA (Foreign Account Tax Compliance Act) and the Common Reporting Standard (
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FAQ :
The Income Tax Department can impose a penalty of up to Rs 10 lakh for failing to disclose foreign income or assets under certain circumstances.
Section 285BA mandates reporting of financial transactions involving foreign assets, while Section 139 requires residents to report worldwide income. Penalties for non-disclosure are primarily covered under Section 270A.
For underreporting foreign income, the penalty can be 50% of the tax payable. For misreporting, including non-disclosure, the penalty can be as high as 200% of the tax payable.
Yes, if the non-disclosure is determined to be wilful and intentional, individuals can face prosecution, including fines of up to three times the tax owed and imprisonment for up to 7 years.
India accesses information about its residents' foreign assets and income through international agreements like FATCA and the Common Reporting Standard (CRS), enabling automatic exchange of information with tax authorities.
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