A US citizen living in India keeps some of his property in the US. Will such a citizen be required to report US investments in India? If yes, what is the process to do so?
,Name withheld on request
Under the India Income Tax Act, all foreign assets are required to be reported in the Income Tax Return (ITR) of India if the individual qualifies as a ‘resident and ordinarily resident’ of India during the relevant financial year, even if whatever his citizenship. Individual. Also, the income earned from such foreign asset during the relevant financial year, along with the nature of income and the head of income under which such income is presented to tax in India, is required to be reported in respect of each foreign asset to the income-tax return. the wanted .
Foreign assets to be reported include foreign bank accounts, financial interests, immovable property, accounts in which a person has the right to sign, trusts, any other capital asset held by the person outside India. One has to be very careful in reporting foreign assets/income in Income Tax Return. Any omission or misstatement can invite additional tax, interest and penal consequences under the Black Money (Undisclosed Foreign Income and Assets) and Tax Act, 2015.
However, the Income Tax Department has provided some relief by adding a note in the income tax return, which states that in the case of an individual, who is not an Indian citizen, who is in India on a business, employment or student visa. It is not mandatory to report the asset acquired during any financial year in which he was a non-resident if no income is received from that asset during the current financial year. However, in view of the huge consequences under the Black Money (Undisclosed Foreign Income and Assets) and Tax Act, 2015 and to prove that the asset is a non-income generating asset, it is recommended to report all foreign assets. She goes.
In your case, you can first find out your residential status in India. If you qualify as a ‘resident and ordinarily resident’ based on your source of income, you can file ITR-2 if you do not have business income or ITR-3 if you have business income. If so, to report foreign assets and foreign income. India Income Tax Return.
-Sonu Iyer is the Tax Partner and People Advisory Services Leader, EY India. Questions at mintmoney@livemint.com
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