The Indian government and its law enforcement agencies get detailed information about financial accounts held by Indian residents in foreign countries through two sources. The information includes: (i) Account holder’s name, address, and tax identification number (TIN); (ii) Account number and balance; (iii) Details of foreign income such as interest, dividends, and other financial proceeds.ITR Filing Deadline: Income Tax Department extends belated, revised ITR filing deadline to January 15, 2025 for these taxpayers
FATCA and CRS are the two sources of information that help the Indian income tax department to know the global income of its resident taxpayers. This also helps the department identify taxpayers who may not have disclosed their foreign assets and income.
CRS stands for the Common Reporting Standard and FATCA stands for the Foreign Account Tax Compliance Act. Both these are international frameworks designed to combat tax evasion by increasing transparency and cooperation among tax authorities worldwide, according to an advisory published on the income tax website on January 2, 2025.
What is CRS
CRS is an initiative of the OECD, requiring financial institutions to report information about financial accounts held by foreign residents to their respective tax jurisdictions.
What is FATCA
FATCA, enacted by the United States, mandates foreign financial institutions to report accounts held by U.S. taxpayers to the IRS.
What are disclosure Requirements under Indian Law Income-tax Act, 1961?
Indian residents must report their foreign assets and income in their income tax returns (ITRs) in accordance with the Indian Income-tax Act, 1961. In particular, foreign assets should be reported using Schedule FA (Foreign Assets) in the ITR form, and income from foreign sources should be reported using Schedule FSI (Foreign Source Income). Additionally, taxpayers can claim tax relief on taxes paid abroad by filing Schedule TR (Tax Relief).
What is the revised and belated ITR filing deadline for AY 2024-25?
The income tax department has extended the last due date to file revised and belated ITRs for fiscal 2023-24 from December 31, 2024 to January 15, 2025. Therefore, taxpayers who have foreign assets or/and income and have not declared the same in their ITR or not filed ITR can do so by January 15.
“The Central Board of Direct Taxes (CBDT), in exercise of its powers under section 119 of the Income-tax Act,1961 (‘the Act’), extends the last date for furnishing belated return of income under sub-section (4) of section 139 of the Act or for furnishing revised return of income under sub-section (5) of section 139 of the Act for the Assessment Year 2024-25 in the case of resident individuals from 31 st December, 2024 to 15th January, 2025,” said CBDT in a circular dated December 31, 2024.
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