Residents in India are required to furnish details of foreign income and foreign assets (including investment in shares and securities) in their Income Tax returns. Failure to do so will attract a penalty of ₹10 lakh under the Black Money Act, irrespective of the value of asset. However, one or more bank accounts with aggregate balance equivalent up to ₹5 lakh (at any time during the financial year) are kept outside the purview of this requirement.
Now, the Budget has proposed to do away with this requirement, in the case of foreign assets other than immovable properties where the aggregate value does not exceed a Rupee equivalent of ₹20 lakh. In case you have immovable properties outside India, you will still be required to furnish the details of the same. The proposal, if passed, will become effective starting October 1, 2024. This move will greatly ease the compliance burden of employees of MNCs who are compensated with ESOPs, for instance.
Faster resolution of assessments
Currently, in cases of initiating assessment, reassessment or recomputation against an assessee by an Assessing Officer (AO), the AO has time up to the end of three years and three months from the end of the relevant Assessment Year (AY) to serve a notice. However, in cases where the AO has information that certain incomes of the assessee amounting to ₹50 lakh or more have escaped assessment, she has time up to the end of 10 years from the end of the relevant AY to serve a notice.
The Budget documents propose to cap this time from 10 years to five years and three months from the end of the relevant AY. If passed, this proposal will come into effect from September 1, 2024. This will mean faster resolution of assessments, reducing uncertainty for taxpayers. Additionally, this can minimise the interest and penalties that may pile up over time.