I-T likely to send notices over undisclosed foreign property
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The Income-Tax Department will send notices to resident Indians regarding undisclosed foreign properties. Information was obtained through spontaneous exchanges and prior investigations into overseas assets. The FAST-DS scheme allows individuals to voluntarily disclose properties without facing penalties or prosecution. This opportunity aims to regularize the foreign assets of small taxpayers effectively. Overall participation in the scheme has been lower than anticipated due to its limitations.
The tax office is expected to send notices over next few weeks to resident Indians owning undisclosed properties abroad. This was indicated by an official of the investigation division of Income-Tax (I-T) Department to tax practitioners and auditors during a webinar on Wednesday, two persons told ET.It’s learnt that the information has been received from multiple jurisdictions by the tax office under the ‘spontaneous exchange of information’ channel and other sources. Such data is proactively shared by certain countries if authorities there believe that the information could be of interest to India.
This route, which offers the possibility of obtaining unreported information on immovable assets, differs from the ‘automatic exchange of information’ (AEOI) — the regular data-sharing pact that India has with several countries.
I-T has reminded several to avail the special disclosure scheme
However, information under AEOI is confined to financial assets like bank accounts, shareholdings, stock options and beneficial ownership of offshore trusts.
“An overseas property cannot be viewed solely from an income-tax perspective. The department may examine whether the property and its income were properly disclosed, but other issues may arise depending on how the property was acquired and funded. If the acquisition created an overseas liability, implications under the Foreign Exchange Management Act (FEMA) may need to be examined. Equally, if the source of the investment is not satisfactorily explained, it could raise questions under the anti-money laundering framework. Reporting to the I-T Department is not a cure for a FEMA or PMLA breach,” said chartered accountant Ashish Karundia.
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Two years ago, the department received a sizeable volume of data on properties owned by Indians in Dubai, which over the years has emerged as a hot property market.
It is believed that some of the information on foreign properties may also have been sourced as ‘information upon request’, which happens on a case-to-case basis after the I-T Department, having discovered particulars about a taxpayer’s secret overseas assets during an enquiry and investigation, makes specific requests to the country concerned for sharing details.
The development comes in the wake of SMS alerts from the I-T department, reminding thousands of individuals to disclose overseas assets under ‘Schedule FA’ in income-tax return forms and avail of the special disclosure or miniamnesty scheme. “Those who have bought immovable property outside India are eligible to opt for the FAST-DS scheme.
They should take this opportunity to avoid penalty and prosecution under the Black Money Law,” said Harshal Bhuta, co-founder at Ascentium India, a Singapore-headquartered professional services firm.
FAST-DS, or Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, is a one-time voluntary disclosure window that opened on August 16 and allows a person to regularise overseas stocks, properties, ESOPs, dividends and interest, among other assets, of up to `1 crore, on payment of 60% tax and penalty. It also permits the declaration of up to `5 crore in foreign assets acquired with tax-paid money by residents using the liberalised remittance scheme, or by returning NRIs who missed declaring foreign accounts. However, due to the low limit of `5 crore and valuation issues, the response to the scheme has so far been lukewarm
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
