Reporting of Foreign Assets in the ITR Forms: What you should know

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Reporting of Foreign Assets in the ITR Forms: What you should know

Lot many residents are investing in foreign assets / stock exchanges. They should not forget to report the same in the ITR forms. Let us know aobut the reporting requirements as under:

 

 

  1. Schedule FA requires reporting of assets held outside India. Such reporting is required if those assets are held at any time during the relevant accounting period.
  2. The reporting is not mandatory by a taxpayer who is a non-resident (NR) or Not ordinarily Resident (NOR).
  3. The Schedule: Schedule FA – Foreign Assets” is required to be filed for a taxpayer who is a resident in India.
  4. More particularly, it is required to be filed by Resident with following criteria:
    (a) He holds any asset outside India;
    (b) He has signing authority in any account located outside India; or
    (c) He has income from any source outside India.
  5. Reporting is required even if the asset is held for a single day during the relevant accounting period.
  6. One may note the remarkable difference in the ITR Forms notified for Assessment Year 2022-23.
  7. In ITR form AY 2022-23, the expression “accounting period” has been replaced with the calendar year ending as on 31st December 2021”.
  8. It means that the assessee shall furnish the details of all foreign assets held between 01-01-2021 and 31-12-2021 in return to be filed for the assessment year 2022-23.
  9. Irrespective of the fiscal year followed in the foreign country (like, in America, calendar year is followed, Australia follows July to June, etc.), the reporting is to be made if the specified foreign assets are held on 31-12-2021.
  10. As a result of this, the entire misunderstanding or miscalculation of the reporting period has been done away with.
  11. Rule 128 of Income-tax Rules 1962 elaborate the principles and conditions for computation and claim of foreign taxes paid in overseas countries by the resident taxpayers. If an assessee has paid tax in any foreign country or specified territory outside India then the taxpayers shall be allowed a credit for the same by way of deduction or otherwise. The credit shall be allowed in the year in which the assessee offered such income to tax or assessed to tax in India. A statement of foreign income offered to tax and the foreign tax deducted or paid on such income is required to be submitted in Form No. 67. The certificate or statement specifying the nature of income and foreign tax deducted or paid are required to be furnished on or before the due date for filing of ITR. This form No. 67 is required to be furnished electronically through the e-filing portal of the Income-tax department. Further, the details of tax relief claimed for taxes paid outside India are required to be reported in ‘Schedule TR’ of ITR form.
  12. There are the occasion when the resident may be required dual reporting, first in Schedule AL which requires reporting of assets and liabilities if their total income exceeds Rs. 50 lakhs. Further, Schedule FA requires reporting of assets held outside India. Rpeorting in Schedule FA doesn’t give immunity from reporting in Schedule AL.
  13. The Schedule FA requires the reporting if the taxpayers havebeneficial owner or beneficiary. Explanation 4 to Section 139(1) of the Income-tax Act 1961 defines the meaning of ‘beneficial owner’. As per the Explanation, a beneficial owner means an individual who has provided, directly or indirectly, consideration for the asset. Further, if such asset is held for the immediate or future benefit of the individual providing the consideration or any other person.
  1. Further, the‘Financial Interest’ held by assessee in any entity outside India would mean the following:
    (a)
     The resident assessee is the owner of record or holder of legal title of any financial account, irrespective of whether he is beneficiary or not; or
    (b) The owner of record or holder of the title in one of the following:

i. An agent, nominee, attorney, or a person acting in some other capacity on behalf of the resident assessee with respect to the entity;

  • A corporation in which the resident assessee owns, directly or indirectly, any share or voting power;

 

iii.  A partnership in which the resident assessee owns, directly or indirectly, an interest in partnership profits or an interest in partnership capital;

  1. A trust of which the resident assessee has beneficial or ownership interest; or
  2. Any other entity in which the resident assessee owns, directly or indirectly, any voting power or equity interest or assets or interest in profits.
Approved DIT Country codes (From Ass. Year 2013-14)

Country code Country Name
1 CANADA
2 UNITED STATES OF AMERICA
5 ITALY
7 KAZAKHSTAN
8 RUSSIAN FEDERATION
14 PORTUGAL
20 EGYPT
28 SOUTH AFRICA
30 GREECE
31 NETHERLANDS
32 BELGIUM
33 FRANCE
35 SPAIN
36 HUNGARY
40 ROMANIA
41 SWITZERLAND
43 AUSTRIA
44 UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND
45 DENMARK
46 SWEDEN
47 NORWAY
48 POLAND
49 GERMANY
51 PERU
52 MEXICO
53 CUBA
54 ARGENTINA
55 BRAZIL
56 CHILE
57 COLOMBIA
58 VENEZUELA, BOLIVARIAN REPUBLIC OF…
60 MALAYSIA
61 AUSTRALIA
62 INDONESIA
63 PHILIPPINES
64 NEW ZEALAND
65 SINGAPORE
66 THAILAND
81 JAPAN
82 REPUBLIC OF KOREA (SOUTH KOREA)
84 VIETNAM
86 CHINA
90 TURKEY
91 INDIA
92 PAKISTAN
93 AFGHANISTAN
94 SRI LANKA
95 MYANMAR
98 IRAN
211 SOUTH SUDAN
212 MOROCCO
213 ALGERIA
216 TUNISIA
218 LIBYA
220 GAMBIA
221 SENEGAL
222 MAURITANIA
223 MALI
224 GUINEA
225 CÔTE D’IVOIRE (IVORY COAST)
226 BURKINA FASO
227 NIGER
228 TOGO
229 BENIN
230 MAURITIUS
231 LIBERIA
232 SIERRA LEONE
233 GHANA
234 NIGERIA
235 CHAD
236 CENTRAL AFRICAN REPUBLIC
237 CAMEROON
238 CAPE VERDE
239 SAO TOME AND PRINCIPE
240 EQUATORIAL GUINEA
241 GABON
242 CONGO, REPUBLIC OF THE…
243 DEMOCRATIC REPUBLIC OF THE CONGO
244 ANGOLA
245 GUINEA
248 SEYCHELLES
249 SUDAN
250 RWANDA
251 ETHIOPIA
252 SOMALIA
253 DJIBOUTI
254 KENYA
255 UNITED REPUBLIC OF TANZANIA
256 UGANDA
257 BURUNDI
258 MOZAMBIQUE
260 ZAMBIA
261 MADAGASCAR
263 ZIMBABWE
264 NAMIBIA
265 MALAWI
266 LESOTHO
267 BOTSWANA
268 SWAZILAND
270 COMOROS
291 ERITREA
352 LUXEMBOURG
353 IRELAND
354 ICELAND
355 ALBANIA
356 MALTA
357 CYPRUS
358 FINLAND
359 BULGARIA
370 LITHUANIA
371 LATVIA
372 ESTONIA
373 REPUBLIC OF MOLDOVA
374 ARMENIA
375 BELARUS
376 ANDORRA
377 MONACO
378 SAN MARINO
380 UKRAINE
381 SERBIA
382 MONTENEGRO
385 CROATIA
386 SLOVENIA
387 BOSNIA AND HERZEGOVINA
389 MACEDONIA
420 CZECH REPUBLIC
421 SLOVAKIA
423 LIECHTENSTEIN
501 BELIZE
502 GUATEMALA
503 EL SALVADOR
504 HONDURAS
505 NICARAGUA
506 COSTA RICA
507 PANAMA
509 HAITI
591 BOLIVIA
592 GUYANA
593 ECUADOR
595 PARAGUAY
597 SURINAME
598 URUGUAY
670 TIMOR
673 BRUNEI DARUSSALAM
674 NAURU
675 PAPUA NEW GUINEA
676 TONGA
677 SOLOMON ISLANDS
678 VANUATU
679 FIJI ISLANDS
680 PALAU
685 SAMOA
686 KIRIBATI
688 TUVALU
691 MICRONESIA, FEDERATED STATES OF…
692 MARSHALL ISLANDS
850 DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA (NORTH KOREA)
855 CAMBODIA
856 LAO PEOPLE’S DEMOCRATIC REPUBLIC
880 BANGLADESH
960 MALDIVES
961 LEBANON
962 JORDAN
963 SYRIAN ARAB REPUBLIC
964 IRAQ
965 KUWAIT
966 SAUDI ARABIA
967 YEMEN
968 OMAN
971 UNITED ARAB EMIRATES
972 ISRAEL
973 BAHRAIN
974 QATAR
975 BHUTAN
976 MONGOLIA
977 NEPAL
992 TAJIKISTAN
993 TURKMENISTAN
994 AZERBAIJAN
995 GEORGIA
996 KYRGYZSTAN
998 UZBEKISTAN
1242 BAHAMAS
1246 BARBADOS
1268 ANTIGUA AND BARBUDA
1473 GRENADA
1758 SAINT LUCIA
1767 DOMINICA
1784 SAINT VINCENT AND THE GRENADINES
1809 DOMINICAN REPUBLIC
1868 TRINIDAD AND TOBAGO
1869 SAINT KITTS AND NEVIS
1876 JAMAICA
9999 OTHERS
List Upto Ass. Year 2012-13

CountryCode CountryName
93  AFGHANISTAN
1907 ALASKA
355 ALBANIA
213 ALGERIA
376 ANDORRA
244  ANGOLA
1264  ANGUILLA
1268 ANTIGUA
54 ARGENTINA
374 ARMENIA
297 ARUBA
247  ASCENSION
61 AUSTRALIA
43 AUSTRIA
994 AZERBAIJAN REPUBLIC
351  AZORES
1242  BAHAMAS
973 BAHARIN
880  BANGLADESH
1246 BARBADOS
375 BELARUS
32 BELGIUM
501  BELIZE
229 BENIN
975 BHUTAN
591 BOLIVIA
387 BOSNIA And HERZEGOVINA
267 BOTSWANA, REPUBLIC OF
55  BRAZIL
673 BRUNEI
359 BULGARIA
226 BURKINA FASSO
257 BURUNDI
1 CANADA
34 CANARY ISLAND
238 CAPE VERDE
1345 CAYMAN ISLAND
236 CENTRAL AFRICAN REPUBLIC
56 CHILE
86  CHINA
61 CHRISTMAS ISLAND
27 CISKEI
672 COCOSKEELING ISLAND
57  COLOMBIA
682 COOK ISLAND
506 COSTA RICA
385 CROATIA
53 CUBA
357 CYPRUS
420 CZECH REPUBLIC
246 DIEGO GARCIA
253 DJIBOUTI
1809 DOMANICCAN REPUBLIC
1767 DOMINICA ISLAND
670 EAST TIMOR
20  EGYPT
503 EL SALVADOR
240 EQUATORIAL GUINEA
291 ERITREA
372 ESTONIA
251 ETHIOPIA
500 FALKLAND ISLAND
298 FAROE ISLAND
679 FIJI REPUBLIC
358 FINLAND
689 FR POLYNESIA
33  FRANCE
594 FRENCH GUIANA
241 GABONESE REPUBLIC
220 GAMBIA
995 GEORGIA
350 GIBRALTOR
299  GREENLAND
590 GUADELOPE
502 GUATEMALA
245 GUINEA BISSAU
224 GUINEA REPUBLIC
592 GUYANA REPUBLIC
509 HAITI REPUBLIC
1808 HAWAII
36 HUNGARY
354 ICELAND
62  INDONESIA
98 IRAN
964 IRAQ
353 IRELAND
972 ISRAEL
39  ITALY
225 IVORY COAST (COTE D IVORIE)
1876 JAMAICA
81 JAPAN
962 JORDAN
855 KAMPUCHEA (CAMBODIA)
7 KAZAKISTAN
254 KENYA
996  KIRGHISTAN
686 KIRIBATI
965 KUWAIT
856 LAOS
371  LATVIA
961 LEBANON
266 LESOTHO
231 LIBERIA
218 LIBYA
423 LIECHTENSTEIN
370  LITHVANIA
389 MACEDONIA
351 MADEIRA ISLAND
265 MALAWI
60 MALAYSIA
960  MALDIVES
223 MALI
356 MALTA
976 MANGOLIA
1670 MARIANA ISLAND
692 MARSHALL ISLAND
596 MARTINIQUE
222 MAURITANIA
230  MAURITIUS
269 MAYOTTE
52  MEXICO
691 MICRONESIA
1664 MONTSERRAT
258 MOZAMBIQUE
264 NAMIBIA
977 NEPAL
31 NETHERLANDS
599 NETHERLANDS ANTHILLES
687 NEW CALEDONIA
64 NEW ZEALAND
505  NICARAGUA
227 NIGER
234 NIGERIA
683 NIUE ISLAND
672 NORFORK ISLAND
850 NORTH KOREA
92  PAKISTAN
680 PALAU
970  PALESTINE
507 PANAMA
675 PAPUA NEW GUINEA
595 PARAGUAY
51 PERU
63  PHILIPPINES
48 POLAND
351  PORTUGAL
1787 PUERTO RICO
974 QATAR
262 REUNION
230 RODRIGUES ISLAND
40  ROMANIA
7  RUSSIA
250 RWANDESE REPUBLIC
684 SAMOA AMERICAN
685 SAMOA WESTERN
378 SAN MARINO
966 SAUDI ARABIA
221  SENEGAL
248 SEYCHELLES
232  SIERRALEONE
65 SINGAPORE
421 SLOVAK REPUBLIC
386  SLOVENIA
677 SOLOMAN ISLAND
252 SOMALIA DEMOCRATIC REPUBLIC
27 SOUTH AFRICA
82 SOUTH KOREA
34 SPAIN
94 SRILANKA
290 ST. HELENA
1869 ST. KITTS/NAVIS ISLAND
1758 ST. LUCIA
508 ST. PIERRE & MIQUELIOM
239 ST. TOME & PRINCEP
1784 ST. VINCENT & THE GRENADIAN
249 SUDAN
597 SURINAM
268 SWAZILAND
41  SWITZERLAND
963 SYRIA
886  TAIWAN
255 TANZANIA
992 TAZAKISTAN
66 THAILAND
228 TOGOLESE REPUBLIC
690 TOKELAU ISLAND
27 TRANSKEI
1868 TRINIDAD & TOBAGO
216 TUNISIA
90 TURKEY
993 TURKMENISTAN
1649 TURKS & CAICOS ISLANDS
688 TUVALU
971  UAE
44  UK
380 UKRAINE
1  USA
998 UZBEKISTAN
678 VANAUTU
39 VATICAN CITY
27 VENDA
58  VENEZUELA
84 VIETNAM
1284 VIRGIN ISLAND (BRI)
1340 VIRGIN ISLAND (USA)
681 WALLIS And FUTUNA ISLAND
381 YUGOSLAVIA
243 ZAIRE
260 ZAMBIA
263 ZIMBABWE
1441 BERMUDA
27 BOPUPATSWANA
237 CAMEROON
235 CHAD
269 COMOROS
242 CONGO
45 DENMARK
593 ECUADOR
49 GERMANY
233 GHANA
30 GREECE
1473 GRENEDA
1671 GUAM
504 HONDURAS
852 HONGKONG
352 LUXUMBURG
853 MACAO
261 MADAGASCAR
373 MOLDOVA
377 MONACO
212 MOROCCO
95 MYANMAR
674 NAURU
47 NORWAY
968 OMAN
46 SWEDEN
676 TONGA
256 UGANDA
598 URUGUAY
967 YEMEN

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