Have foreign income or overseas assets? Your AIS will soon show them | Personal Finance
If you own a foreign bank account, earn income overseas or hold investments outside India, your Annual Information Statement (AIS) will soon become far more comprehensive.
The Central Board of Direct Taxes (CBDT) has expanded the scope of the AIS to include information on foreign income and overseas assets received by the Income Tax Department from foreign tax authorities under international information-sharing agreements.
The move is aimed at helping taxpayers reconcile the information available with the tax department before filing their income tax returns while also improving compliance.
What has changed?
Until now, the AIS primarily displayed information relating to income and financial transactions within India, such as:
-
Salary -
Interest income -
Dividend income -
Securities transactions -
Mutual fund investments -
Tax deducted at source (TDS) -
Tax collected at source (TCS) -
High-value financial transactions
Under a new CBDT order issued on July 8, the statement will also include information received from foreign jurisdictions under tax information exchange agreements entered into by India.
This means taxpayers may begin seeing details relating to overseas financial accounts, foreign investments and foreign-source income in their AIS if such information has been shared with India.
The order inserts a new category titled “Information received under an agreement referred to in sections 90 or 90A of the Income-tax Act, 1961” into the AIS reporting framework. Sections 90 and 90A govern India’s tax treaties and agreements for exchange of tax-related information with foreign jurisdictions.
Inclusion of foreign information in AIS will make it more difficult for taxpayers to inadvertently omit overseas income or assets while filing returns.
Resident and ordinarily resident (ROR) taxpayers in India are required to disclose foreign assets and foreign-source income in their income tax returns and pay tax on their global income, subject to relief available under applicable Double Taxation Avoidance Agreements (DTAAs).
Who will be affected?
The change is particularly relevant for:
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Resident Indians with foreign bank accounts -
Employees who receive overseas salary or stock compensation -
Individuals with foreign investments -
NRIs who have become resident in India and are required to report global income -
Professionals and business owners earning income abroad.
Why is this important?
Many taxpayers currently rely on the AIS to cross-check whether all income reported to the Income Tax Department has been correctly disclosed in their income tax return.
With foreign information also becoming available in the statement, taxpayers will be able to identify mismatches before filing returns instead of receiving notices later.
The move is also expected to improve reporting of foreign assets in Schedule FA and foreign-source income disclosed in income tax returns.
