Do US residents in India must disclose their international property in ITR?

A US citizen dwelling in India maintains a few of his or her property within the US. Will such a citizen be required to report the US investments in India? If sure, what’s the method of doing so?

-Name withheld on request

Under the India Income-tax Act, there’s a requirement to report all international property within the India Income-tax Return (ITR) if the person qualifies as ‘resident and ordinarily resident’ of India in the course of the related monetary yr regardless of the citizenship of the person. Also, the earnings earned from such international property in the course of the related monetary yr together with the character of earnings and head of earnings below which such earnings has been provided to tax within the India Income-tax return must be reported in relation to every international asset.

The international property to be reported embody international financial institution accounts, monetary pursuits, immovable property, accounts wherein a person has signing authority, trusts, every other capital asset held by the person outdoors India. One needs to be very cautious in reporting international property/ earnings within the Income-tax return. Any omission or inaccurate particulars might invite further taxes, curiosity, and penal penalties below Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Although, the income-tax division has supplied some reduction by including a word within the earnings tax return, which states that in case of a person, not being an Indian citizen, who’s in India on a enterprise, employment or pupil visa, an asset acquired throughout any monetary yr wherein he was non-resident isn’t necessary to be reported if no earnings is derived from that asset in the course of the present monetary yr. However, given the onerous penalties below the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 and the onus to show that the asset is a non-income producing asset, it is strongly recommended to report all international property.

In your case, you could first confirm your residential standing in India. If you qualify as ‘resident and ordinarily resident’, relying in your supply of earnings, you could file ITR-2 should you would not have enterprise earnings or ITR-3 in case you have enterprise earnings, to report international property and international earnings within the India Income-tax return.

-Sonu Iyer is tax accomplice and folks advisory companies chief, EY India. Queries at mintmoney@livemint.com

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