The Indian government is making all efforts to ensure that all foreign income and assets of the residents are disclosed in the Income Tax return itself. Now, many taxpayers have disclosed their foreign income and assets. However, there is still a gap on the part of various taxpayers who have failed to disclose their foreign assets or income. If you are one of those then the Income Tax Department has issued a special advisory to make such disclosure by 31st December to avoid adverse consequences.
1. Source of Information for the Government of India
- To enhance tax transparency and compliance across the globe, the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA) frameworks are designed to curb tax evasion.
- This platform ensures that information is shared among tax officials worldwide to increase transparency.
- CRS requires financial institutions to report information about financial accounts held by foreign residents to their respective tax jurisdictions. This information is then exchanged with other jurisdictions annually.
- Similarly, FATCA, enacted by the United States, mandates foreign financial institutions to report accounts held by U.S. taxpayers to the IRS.
Read Also: Government Notified New Foreign Exchange (Compounding Proceedings) Rules, 2024
2. Nature of Information received by the Indian Government
Under CRS and FATCA, the Government of India received the following detailed information about the accounts held by its residents in foreign countries:
- Account holder's name, address, and tax identification number (TIN)
- Account number and balance
- Detail of Income such as interest, dividends, and other financial proceeds.
Through this information, the government can identify the Indian residents and whether such person has made corresponding disclosure in his ITR or not.
3. Disclosure of Foreign Asset and Foreign Income in Income Tax Return
The taxpayer is required to disclose Foreign Asset and Foreign Income in Income Tax return under the following clauses:
a. Schedule FSI: Details of income earned outside India and Tax Relief
- Details of income earned outside India and corresponding tax deducted are furnished in Schedule FSI of Income Tax Return.
- The taxpayer is required to furnish information under the following heads:
- Head of Income, i.e., Salary, Income from House Property, Capital gain, etc.
- Income from outside India included in Total Income;
- Tax Paid outside India
- Tax payable on such income under normal provisions in India
- Tax Relief available in India (lower tax paid outside India and tax payable on such income in India);
- The relevant article of DTAA if relief is claimed under section 90 or 90A of the Income Tax Act
b. Schedule TR: Summary of tax relief claimed for taxes paid outside India (available only in case of resident)
- Taxpayers are required to furnish country-wise details of taxes paid outside India. This clause applies only to the residents.
- The following information is required to be furnished in the Income Tax Return:
- Country code
- Taxpayer Identification Number
- Total taxes paid outside India
- Total tax relief available
- Tax Relief Claimed under section
- Total Tax relief available in respect of country where DTAA is applicable (section 90/90A)
- Total Tax relief available in respect of country where DTAA is not applicable (section 91)
c. Schedule FA: Details of Foreign Assets and Income from any source outside India
- The taxpayer is required to furnish details of foreign assets held outside India (including any beneficial Interest) at any time during the calendar year ending as of 31st December under the following clauses:
- Foreign Depository Accounts and custodial Accounts;
- Foreign Equity and Debt Interest held in any entity;
- Foreign Cash Value Insurance Contract or Annuity Contract;
- Financial Interest in any Entity held;
- Immovable Property;
- Any other Capital Asset held;
- Account(s) in which the taxpayer has signing authority and which has not been included in the above disclosures;
- Details of trusts, created under the laws of a country outside India, in which the taxpayer is a trustee, beneficiary, or settlor
- Details of any other income derived from any source outside India which is not included in,
- Above mentioned clauses; and
- income under the head business or profession
- Details of foreign assets held as of 31st December are to be furnished every year if such asset is held as of 31st December.
4. Consequences of Non-disclosure of Foreign Assets of Income
- If the taxpayer fails to furnish the information of foreign assets or Income in Income Tax return and as per information obtained by the Indian government, the taxpayer has such income or assets then the taxpayer may have to face stringent penalties and imprisonment in some cases as well.
- The Taxpayer can be prosecuted under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
5. Disclosure of foreign assets and foreign Income in Revised Income Tax Return or belated Income Tax return
- 納税者は、所得税申告の期限（2023-24年度の場合は2024年7月31日または2024年10月31日）までに、外国資産や外国所得の詳細を申告することが求められます。
- しかし、所得税申告書（ITR）でこれらの開示を怠った場合、修正申告を行う選択肢があります。
- 修正申告において、納税者は必要な開示を行うことができます。
- 2023-24年度の修正申告期限は2024年12月31日です。
- 修正申告を行うことで、納税者は以下のことが可能になります：
- すべての外国資産および所得の完全かつ正確な開示を確実にする。
- 未開示による罰則や法的措置を回避する。
- インドの税法および租税条約（DTAA）の規定に基づく税制優遇措置を受ける。
- 期限までにITRを提出できなかった場合、2024年12月31日まで期限後申告を行うことができます。
6. ITR-U（更新申告）が常に解決策とは限らない
- 期限後申告や修正申告の期限がすでに過ぎている場合はどうすればよいでしょうか。
- 納税者は、ITR-U様式による更新申告を行う選択肢があります。
- しかし、ITR-Uが外国資産や所得の開示を是正するための解決策になるとは限りません。
- ITR-Uは、過少申告や未申告の所得を是正するためにのみ使用でき、新規の開示や訂正には使用できません。新規の開示や訂正は、修正申告または期限後申告でのみ可能です。
- ITR-U（更新申告）は主に、過少申告や未申告の所得を是正するためのものです。そのため、Schedule FA（外国資産）への記載漏れなど、所得に関連しない開示事項の訂正には使用できません。
7. ブラックマネー法に基づく開示
- 当初のITR、修正申告、または更新申告で外国資産や所得を開示できなかった場合でも、ブラックマネー法に基づいて開示する選択肢が残されています。
- ブラックマネー法は、未開示の外国資産や所得を自主的に開示する機会を納税者に提供しており、これにより罰則や訴追のリスクを軽減できる可能性があります。
- ただし、この選択肢は、税務当局が執行措置やFATCA、CRSといった国際的なデータ共有メカニズムを通じてコンプライアンス違反を特定する前に、納税者が自主的に申し出た場合にのみ有効です。
Conclusion
外国資産や外国所得の開示は、罰則や訴追を回避するために非常に重要です。現在、インド政府は外国所得や資産に関する情報を網羅的に把握しているため、納税者は必要な開示を行うための是正措置を講じる必要があります。
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