Income-Tax Department urges taxpayers to declare foreign assets through new disclosure scheme

The Income-Tax Department is reaching out to select taxpayers who hold residential and commercial properties in the UAE and other countries to declare their undeclared overseas assets. Around 1,100 taxpayers have filed applications so far under the Foreign Assets of Small Taxpayers-Disclosure Scheme, which was launched on August 16 and remains open until December 31.

Portal Details

Tax authorities have displayed information on the e-filing portal for assets reported on individual PANs by foreign jurisdictions. According to sources in the Ministry of Finance, taxpayers can log in to the portal and download their information for three years from 2022 to 2024. This information comes from the Automatic Exchange of Information with other countries. The department decided to share this details in a high-level meeting held on October 23 to encourage people to use the scheme.

International Frameworks

Details about foreign assets and income are shared between countries through international reporting frameworks like the Common Reporting Standard and the Foreign Account Tax Compliance Act. These frameworks help tax authorities tackle tax evasion by increasing transparency. However, while the disclosure window helps people come clean, it has also caused doubts and questions because individuals face high fees and penalties to participate.

Context

Global tax authorities share financial information across borders to prevent hidden wealth and reduce tax evasion. Programs like automatic information exchange make it easier for local tax bodies to spot undeclared properties or bank accounts held abroad.