• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer
  • About Us
  • Executive Team
  • Investors
  • Privacy Policy
  • Terms Of Use
  • Contact Us

  • Blog
  • Tax Services
    • E-file ITR for Salaried
    • E-file ITR for Business
    • TDS E-file for Business
    • Manage Tax Practice
  • Tax Optimizer
    • Optimize Tax – Salaried
    • Optimize Business Tax
  • Help
    • FAQs
    • Glossary
    • Resources
    • Product Tour
    • Tax Calculator
  • Efiling
  • Income & Investments
  • Tax Compliance
  • Tax Optimization
  • Tax Refunds

E-filing mandatory for individuals holding accounts or assets abroad

June 24, 2016 by Sudhir Kaushik

Most individuals who have travelled outside India for jobs, open a bank account in the visited country. In most cases, the account is not closed. Then, there are some individuals who own a residential house property outside India. They may not go there or have any taxable income. Yet, all individuals falling in any of the above categories need to file their income tax return online, declaring all foreign assets. The new tax laws are not applicable to non-residents. Only residents and not-ordinarily residents are obliged to file ITR with details of foreign assets even if there is no taxable income.

E-filing Made Mandatory to check Black Money

Those who became residents of India and failed to report global income in the past 16 years would be under the scanner of Income Tax Department. In order to avoid last minute rush while filing ITR in July 2012, it’s already time to look at these assets or financial interests and ensure that tax liability has been discharged. Till now, the tax man was allowed to go back to up to 6 years only. His inability to reopen assessments older than 6 years was used by some to convert black money into white money. For example, one can buy an NSC from post office by cash payment. In such transactions, the money that comes back to the taxpayer at the end of the term (usually more than 6 years) is official and cannot be questioned by the tax department.
In a first of its kind estimate released by the government recently, around $500 billion (Rs 24.5 lakh crores) deposited in tax havens abroad is held by Indians. The intent of the government is to detect the undisclosed income through these foreign assets by ensuring that they are reported in the ITR. Hence, all residents of India who have any asset located outside India or are a signing authority in any account outside India will have to e-file an income-tax return even if their taxable income is below the basic exemption limit.
Alongside, the government has proposed levying a tax of flat 30 per cent on undisclosed money, credits, investments and expenditures, irrespective of the income slab of the individual. Moreover, a penalty of up to 300% of the tax amount, interest and prosecution can be levied on undisclosed income.
To strengthen its efforts to control black money flow, the wealth tax laws are also proposed to be changed under DTC to ensure that those amassing wealth outside pay due taxes.

ITR filing for Taxpayers with Assets/Accounts Abroad

Sahaj (ITR 1) and Sugam (ITR 4 S) will not be applicable for person having foreign assets. The tax authorities have introduced a new ITR 2 form, which includes additional fields seeking details of foreign assets in the Income Tax Return (ITR) forms for the Assessment Year 2012-13. Taxpayers, who hold foreign bank accounts or properties, will now have to furnish details of their foreign assets which include information like:

  • Country name
  • Address of the bank
  • Name mentioned in the account
  • Peak balance during the year, after converting the value of the foreign currency in INR

Similar information will also have to be provided by the taxpayer to I-T authorities if s/he holds financial interest in any entity abroad, immovable property overseas and or any other asset outside India. The Income Tax Department, in the new ITR, has also asked the taxpayer to furnish the details of account/accounts abroad in which the taxpayer has “signing authority”.
To ensure that you are complying with all the applicable income tax laws as updated by Budget 2012, file your ITR using the Salary eFile Premium package. The service includes automatic selection of the new ITR form, auto-computation of taxes, auto-upload of return, after review by a tax expert. Additionally, you can keep your tax documents secure in an online Tax Vault for 16 years.

Filed Under: Tax Refunds

Primary Sidebar

E-mail Newsletter

  • Facebook
  • Instagram
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

More to See

TDS RETURN FILING: know law, software process and benefits of outsourcing

September 21, 2022 By Aastha Sharma

How Salary Restructuring Helped in Saving Tax?

August 17, 2022 By Sudhir Kaushik

Tags

advance tax black money budget 2017 claims tax benefits CTC Direct Tax Burden e-file tax return elss ultimate returns form 16 gratuity hard earned money home loan nps HRA income expenses income tax declaration income tax department income tax return income tax saving investment declaration Investment tax saving investor financial needs long-term capital gains medical leave encashment National Pension System NPS plan your investments presumptive taxation scheme retirement benefits return filing deadline save tax section 80c self assessment tax service tax short-term capital gains Suggestions Budget 2017 tax tax-free tax details salaried taxpayers tax efficiency tax optimization tax return filing tax saving tax saving tips taxspanner undeclared income

Footer

Services

  • E-file Tax Returns
  • Tax Optimizer
  • Respond To ITD
  • Consult Experts
  • Tax Practitioners
  • TDS Returns

Help

  • Product Guide
  • FAQs
  • Tax Calculators
  • Glossary
  • Contact Us
  • Forget Password

Taxspanner logo
TaxSpanner is India’s largest and most trusted website that offers online preparation and filing of individual Income Tax Returns (ITR).

Read More

Copyright © 2023 · Span Across IT Solutions Private Limited.