Declaration of Foreign Assets and Income

Advisory for Indian Residents (FY 2024–25 | AY 2025–26)

The Income Tax Department of India receives information on foreign financial accounts and income of Indian residents through international information-sharing mechanisms such as the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA). In view of this, Indian residents are required to make full and accurate disclosure of foreign assets and foreign-source income in their Income Tax Return (ITR), wherever applicable.

This advisory is issued in the interest of the Indian community to promote awareness and voluntary compliance with the provisions of the Income-tax Act, 1961.

Who Should Read This Advisory

This advisory is relevant for:

• Indian citizens and Persons of Indian Origin (PIOs) who qualify as Residents in India for tax purposes

• Individuals who hold or have held any foreign asset during FY 2024–25

• Individuals who have earned any foreign-source income, whether taxable or exempt

• Taxpayers who may have inadvertently missed reporting foreign assets or income in their original ITR

Determination of Residential Status

All members of the Indian community are advised to first ascertain their residential status for Financial Year 2024–25 under the Income-tax Act.

Residential status determines:

• Whether disclosure of foreign assets is mandatory

• Whether foreign-source income is required to be reported in India

Incorrect determination of residential status may result in incorrect filing of the Income Tax Return.

Mandatory Disclosure of Foreign Assets and Income

Indian residents are required to disclose details of foreign assets and foreign income in their Income Tax Return, even if:

• The income is below the basic exemption limit, or

• The foreign asset did not generate any income during the year

Foreign assets and income are required to be reported in the prescribed schedules of the ITR.

Illustrative examples include:

• Foreign bank accounts

• Custodial and depository accounts held abroad

• Foreign shares, securities, or investments

• Foreign immovable property

• Foreign pension or retirement accounts

• Income earned from foreign sources

Filing of Revised Return – Opportunity to Rectify

If a taxpayer has failed to report foreign assets or income in the original Income Tax Return, the Income Tax Department provides an opportunity to correct such omissions or inaccuracies by filing a revised return.

Key timeline:

• Financial Year: 2024–25

• Assessment Year: 2025–26

• Last date to file revised return: 31 December 2025

Filing a revised return within the prescribed timeline allows taxpayers to remain compliant with tax laws.

Important Information on ITR Forms

• ITR-1 and ITR-4 do not contain Schedule FA (Foreign Assets)

• Taxpayers having foreign assets or foreign income must select an appropriate ITR form that includes:

  • Schedule FA – Foreign Assets

  • Schedule FSI – Foreign Source Income, where applicable

Selecting an incorrect ITR form may result in incomplete disclosure.

Step-by-Step Guidance

Detailed, step-by-step guidance for filing the relevant schedules relating to the declaration of foreign assets and income is provided in the documents attached on this page. Community members are encouraged to carefully review the guidance before filing or revising their Income Tax Return.

Brochure - Declaration of Foreign Assets and Income

Step by Step Procedure - Declaration of Foreign Assets and Income

Frequently Asked Questions (FAQ)

1. Who is required to declare foreign assets in the ITR?

Any individual who is resident in India during the relevant financial year and holds any foreign asset, whether or not it generates income, is required to declare such assets in the ITR.

2. Do I need to declare foreign assets even if my income is below the exemption limit?

Yes. Disclosure of foreign assets is mandatory for Indian residents irrespective of income level.

3. What are some examples of foreign assets?

Examples include foreign bank accounts, shares or securities held abroad, foreign immovable property, foreign pension accounts, custodial accounts, and other financial interests outside India.

4. Which ITR forms allow declaration of foreign assets?

Foreign assets are declared in Schedule FA, which is not available in ITR-1 and ITR-4. Taxpayers must use the appropriate ITR form that includes Schedule FA.

5. What should I do if I forgot to report foreign assets or income earlier?

You may file a revised return to correct omissions or inaccuracies in your original ITR.

6. What is the last date to file a revised return for AY 2025–26?

The last date to file a revised return for Assessment Year 2025–26 is 31 December 2025.