New Delhi, July 18, 2025 — As the deadline for filing Income Tax Returns (ITR) for Assessment Year 2025–26 approaches, the Income Tax Department has issued a strong advisory urging taxpayers to disclose all foreign assets and income in their returns. The move is part of a broader compliance initiative aimed at enhancing transparency and curbing tax evasion under international frameworks such as the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA).
Taxpayers classified as “Resident and Ordinarily Resident” (ROR) are required to report foreign holdings and income in Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income) of their ITR forms. These disclosures include details of overseas bank accounts, equity holdings, immovable properties, trusts, and income from dividends, interest, or capital gains.
The department emphasized that non-disclosure could attract severe penalties under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015, including fines up to ₹10 lakh and possible prosecution. To claim relief under the Double Taxation Avoidance Agreement (DTAA), taxpayers must also file Form 67 before submitting their ITR.
With the ITR-2 and ITR-3 forms now enabled for online filing, taxpayers are advised to select the correct form based on their income profile. Individuals with foreign investments, such as US stocks, must avoid using ITR-1 or ITR-4 and instead opt for ITR-2 or ITR-3, depending on whether they have business income.
The department reiterated that it receives detailed financial data from foreign jurisdictions under CRS and FATCA, including account balances, income streams, and tax identification numbers. This data is used to verify taxpayer disclosures and identify discrepancies.
The final date for filing ITR for FY 2024–25 is September 15, 2025, with revised or belated returns accepted until December 31, 2025. Taxpayers are encouraged to ensure accurate reporting, currency conversion using SBI’s TT Buying Rate, and timely submission of supporting documents to remain compliant.
This advisory underscores the government’s commitment to global tax transparency and responsible financial reporting.
