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ITR-U for declaring foreign assets under schedule-FA without tax liability

ITR 223 views 1 replies

Goutham

Engineer

1 Points Joined February 2025

I am working in a company where part of the payment comes fron RSUs, ESOPs and ESPP etc.

I filed ITR-1 for last financial year and the TDS on the vested shares is already reported as perquisite income in Form 16.

I want to file ITR-U for updating my previous FY's ITR-1 to ITR-2. I'm 100% sure that, the tax equation does not change (as I haven't sold any of the vested stocks). I want to file an update as I missed declaring foreign assets under schedule FA, FSI etc.

Can I file an ITR-U without additional income tax liability?

Ideally I should always declare my ITRs accurately, but I'm wondering if I should go through the trouble of filing revised ITR. Anyway schedule FA requires me to declare all foreign assets, so can I just cumulatively declare all the assets when filing ITR-2 for FY 2024-25?

I would love to know your thoughts on this

Replies (1)

Rama chary Rachakonda

Master in Accounts & high court Advocate

8778 Points Joined December 2011

You're looking to file an updated ITR (ITR-U) to declare foreign assets under Schedule FA and FSI, which were missed in your original ITR-1 filing.

Key Points to Consider 1. *No change in tax liability*: You've confirmed that the tax equation remains the same, as you haven't sold any vested stocks.

2. *Missing foreign asset declaration*: You want to declare foreign assets under Schedule FA and FSI, which is a mandatory requirement.

3. *Filing ITR-U*: You're considering filing an updated ITR (ITR-U) to rectify the omission.

Filing ITR-U without Additional Tax Liability Yes, you can file an ITR-U without incurring additional income tax liability, provided you meet the following conditions:

1. *No change in taxable income*: Your taxable income remains the same, and you're not reporting any new income or claiming additional deductions.

2. *Only updating omitted information*: You're only updating the omitted information (foreign asset declaration) and not making any changes to your taxable income. Cumulative Declaration in ITR-2 for FY 2024-25 While it's technically possible to cumulatively declare all foreign assets when filing ITR-2 for FY 2024-25, it's not the recommended approach.

Here's why: 1. *Non-compliance*: By not declaring foreign assets in the original ITR-1, you may be considered non-compliant with the tax laws.

2. *Penalties and interest*: If the tax authorities discover the omission, you may be liable for penalties and interest on the tax due.

3. *Rectification*: Filing an ITR-U to rectify the omission is a more proactive approach, demonstrating your commitment to tax compliance.

Recommendation To maintain tax compliance and avoid potential penalties, it's recommended that you file an ITR-U to update your original ITR-1.

This will ensure that you're declaring all required information, including foreign assets, and demonstrating your commitment to tax compliance.

Additionally, consult with a tax professional or chartered accountant to ensure you're meeting all the necessary requirements and following the correct procedures.

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