Do I need to declare my US account in ITR?

Name withheld on request

Based on the limited information provided by you, it is assumed that you are an Indian citizen and qualify as resident and ordinarily resident and thus you are required to file details (in ITR-2) of all your foreign assets. ) is required to be disclosed.

The Foreign Assets (‘FA’) schedule in the ITR form seeks to include details of assets that a taxpayer holds outside India. In the absence of any specific direction as to whether an asset is to be included or not, it is to be assessed on the basis of the nature and nature of the asset, the terms and description mentioned in the Schedule and the limited instructions/guidelines in this regard needed.

It is assumed that a 401(k) account is an individual pension account in the US to which both the employer and the employee make contributions during the period of service. It would be wise to disclose the details of the 401(k) account on Schedule FA.

With regard to the specific section of Schedule FA under which it must be disclosed, this will depend on the exact nature of the 401K account that will need to be assessed. If the nature of the account does not fall in any specific category, then one can consider reporting it under residual section D- ‘Any other capital asset’ (as per ITR-2 form applicable for FY 2021-22) Is.

I had invested in an Unsecured Fixed Deposit (FD) scheme of a company. In 2018, the company stopped paying interest and did not return the principal amount to the depositors. After litigation under the Negotiable Instruments Act, the company agreed to pay me the principal amount without any interest for the period of the original deposit or the subsequent default period – about 4 years in total. Can I claim any benefit as ‘Long Term Capital Loss’ for the period in which I lost interest on my deposits while filing my Income Tax Return? The settlement was done during the current financial year and the repayment is being done in monthly instalments.

Name withheld on request

Based on the information provided by you, it is presumed that, since no interest was paid to you for the default period, no related income was also proposed to tax by you. In such a case, it cannot be treated as mere receipt of a potential income, which cannot be treated as a loss for tax purposes, even if it is so in economic terms. Also, transfer of fixed deposit does not result in such loss as the principal amount is being repaid to you in full. Therefore, subject to review of the underlying deposit scheme and terms of negotiated settlement, capital loss may not be available in this case.

Parijad Sirwala is Partner and Head, Global Mobility Services, Tax, KPMG in India.