ITR filing 2026: Have foreign assets or income? Not reporting them may cost you ₹10 lakh

Taxpayers who qualify as residents for the purpose of income tax in India are required to disclose their foreign income and assets while filing their income tax return (ITR) every financial year. The disclosure is made through Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income).

If a taxpayer fails to accurately report such information, then they can face serious consequences. Non-disclosure of such income and assets can lead to a penalty of ₹10 lakhs, highlighting the seriousness of the tax department in dealing with such transactions.

As per the income tax law, Indian residents qualified as ‘Resident and Ordinarily Resident’ must disclose their foreign assets and income in their tax return.

While filing ITR, the taxpayer is required to include details about the bank account in a foreign country or the signing authority of the accounts held abroad. Such individuals must also disclose their investments in real estate, stocks, mutual funds or any other financial instruments, according to a Cleartax report.

Since foreign assets and income are required to be disclosed while filing tax return, the deadline is aligned with the regular income tax filing due date. For most taxpayers who do not require an audit, the ITR deadline is July 31 of the relevant assessment year.

However, if your foreign assets were declared incorrectly or not declared at all, a taxpayer can file a revised return by March 31 of the next year. Earlier, the deadline was December 31 of the relevant assessment year or before the tax department completes assessment, whichever is earlier.

However, the latest policy updates have extended this deadline, giving taxpayers a longer window to correct mistakes. Let's say you file your ITR for FY 2025-26 on July 15 this year but later in September, you discover that you missed reporting your foreign assets or income, then you can simply simply file a revised return until March 31, 2027. This is an advisable route for correcting mistakes instead of waiting for the income tax department to flag it.

One of the biggest advantages of filing a revised return is that the taxpayer is not required to pay any penalties. However if you did not file original return within the due date, then the ITR is treated as a belated return, which comes with extra fees under separate provisions.

A person filing belated return until December 31 of the relevant assessment year will be charged a penalty of ₹5,000 or ₹1,000, depending on their income.

A taxpayer could face severe penalties if they provide incorrect information or fail to disclose details of their foreign assets. The penalties for failing to disclose or misrepresenting foreign assets in schedule FA of the ITR are as follows:

Other than avoiding severe penalties and other consequences, disclosing accurate information about your foreign assets and income also comes with several other benefits for the tax resident.

Accurate disclosure help taxpayers claim tax relief for the taxes paid in a foreign country by filling in Schedule TR (Tax Relief) and taking advantage of a double taxation avoidance agreement.

Eshita Gain is a digital journalist at Mint, where she joined in May 2025. She writes on corporate developments, personal finance, markets, and business trends, with a focus on delivering timely and relevant stories to a broad audience. <br><br> While her core beat lies in business and finance, she is not confined to a single niche and frequently explores stories across domains, including international relations and policy developments. <br><br> She holds a postgraduate diploma in business and financial journalism by Bloomberg from the Asian College of Journalism (ACJ), Chennai. During her time there, she received rigorous training in tracking financial data, interpreting corporate filings, and reporting on business developments. She has pursued her graduation from St. Joseph’s University, Bengaluru in a multi-disciplinary course. Her majors included Journalism, International Relations, peace and conflict studies. <br><br> Eshita has previously worked in digital marketing, which enables her to write SEO friendly copies that are clear and engaging. <br><br> Her primary interest lies in breaking down complex subjects and writing clear, accessible copies that inform readers. She aims to bridge the gap between technical financial language and everyday understanding. Outside the newsroom, Eshita enjoys reading non-fiction, and exploring new places, constantly seeking fresh perspectives and stories beyond headlines.

Catch all the Instant Personal Loan, Business Loan, Business News, Money news, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

Log in to our website to save your bookmarks. It'll just take a moment.