The Income Tax Department has provided significant relief to taxpayers. Now, no strict action will be taken against you even if you do not give information about foreign assets up to ₹ 20 lakh. Know what the benefit of this new rule is and who will get special benefits from it.
CBDT issued a relief circular
The Central Board of Direct Taxes (CBDT) has issued a circular on 20 August. This circular clearly states that if a person forgets to give information about foreign assets up to ₹ 20 lakh in his Income Tax Return (ITR), then no action will be taken against him under Section 42 and/or Section 43 of the ‘Black Money Act 2015’. This will give great relief to those taxpayers who have low-value assets abroad.
People working abroad will get relief
Himank Singla, partner and chartered accountant of SBHS Associates, says that this rule is very beneficial for those who work in foreign companies and live abroad. Often, such people forget to give information about the small amount left in their foreign bank accounts or other small assets while returning to India. Now, under this new rule, they will not have to worry about this.
In the earlier rules, if there was a balance of more than ₹ 5 lakh in a foreign bank account and its information was not given, then strict legal action could be taken. But with this new circular, now there will be no strict action even on such minor mistakes.
Earlier, there was a fine of ₹ 10 lakh
Under the ‘Black Money Act’, till the financial year 2023-24, there was a provision of a hefty fine of up to ₹ 10 lakh and imprisonment of 6 months to 7 years for not giving information about foreign assets in the ITR. But the government is constantly trying to simplify the income tax rules. Some such concessions were also given in last year’s Union Budget. This step is for those honest taxpayers who accidentally forget to give minor information.
Exemption will not apply to immovable property
Singla has also clarified that this exemption does not apply to all types of property. He said, “It is important to note that this new rule prevents penalty and legal action on small properties up to ₹ 20 lakh, but immovable property is still outside the scope of this exemption.” That is, if you have bought any land or house abroad and have not given its information, then this exemption will not apply to it.