ITR filing 2025: Avoid ₹10 lakh penalty, 8 foreign asset disclosures you must not miss

Many Indian taxpayers now own shares, exchange-traded funds (ETFs), or other financial instruments outside of India due to the ease with which they can now invest in international markets.

Despite the potential for large returns, these foreign investments also come with important tax and regulatory obligations.

8 foreign assets that must be disclosed in your ITR

Accounts held in foreign banks, including savings and current accounts.

Accounts where securities (stocks, bonds, etc.) are held electronically.

Accounts where a custodian (such as a bank or financial institution) holds assets, usually for the benefit of an individual or entity.

Shares or equity investments in companies that are listed or incorporated in foreign countries. These must be disclosed, especially if they yield dividends or if you hold significant quantities. ETFs that invest in assets outside of India.

Real estate assets (land or buildings) owned in a foreign country. This includes residential, commercial, or agricultural properties.

If you hold any life insurance or other types of insurance policies with foreign insurance companies, these are considered foreign assets and must be disclosed.

ESOPs granted by foreign companies are another type of foreign asset

This refers to cryptocurrencies (like Bitcoin or Ethereum), , or any other digital assets

Residents must disclose overseas assets such as bank accounts, securities, funds, insurance/ESOPs, foreign immovable properties.

You must report:

⦁ Foreign shares/ETFs (held directly or through platforms like Interactive Brokers, Vanguard, etc.)

⦁ Other capital assets or income from foreign sources

• Peak balance, closing balance, and income from these assets during the calendar year (1 Jan to 31 Dec) must be disclosed in INR using SBI’s TTBR.

Schedule FA is applicable to resident and ordinarily resident (ROR) taxpayers. Not applicable to NRIs and RNORs.

Non-disclosure may lead to a ₹10 lakh penalty and imprisonment of 6 months to 7 years. Penalty & imprisonment will not be applicable if the aggregate value of asset (other than immovable property) does not exceed ₹20 lakh.

• Report country-wise foreign income, nature, and tax paid.

• Dividends, interest, capital gains, or rent earned abroad

• Mention relevant head of income, country, TIN, and DTAA article (if relief is claimed)

Failure to disclose can lead to a ₹10 lakh penalty and imprisonment of 6-months to 7-yrs. Penalty & imprisonment will not be applicable if the aggregate value of asset (other than immovable property) does not exceed ₹20 lakh.

Tax relief refers to the deduction or credit allowed to a taxpayer for taxes paid in a foreign country to avoid double taxation of the same income in India.

Report the details of crypto transactions, including acquisition and sale dates, and values. No set-off of losses allowed under Section 115BBH.

Applicable to taxpayers who have dealt in:

Cryptocurrencies (e.g., Bitcoin, Ethereum) NFTs or other blockchain-based assets

Missing or incorrect disclosures could result in your return being deemed defective under Section 139(9), leading to penalties and unnecessary delays.