Your foreign assets history has now made its way into the Annual Information Statement (AIS). Starting last week, the AIS has begun displaying details of foreign financial assets and foreign income for calendar years (CY) 2022, 2023 and 2024.
This, however, may create confusion because the current income tax return (ITR) filing window requires taxpayers to disclose only foreign assets held or sold during CY2025.
So, how should you use this historical information while filing this year's ITR? The answer depends on your situation.
In any case, the newly available information is not meant to be reported again in this year's return. Instead, it serves as a reconciliation tool that allows taxpayers to verify whether foreign assets and related income were correctly disclosed in earlier ITRs.
The Foreign Assets Information (FAI) report, available as a password-protected PDF, contains details such as foreign bank accounts, account balances, dividends, interest, gross proceeds and other payments received by the Income Tax Department from overseas tax authorities. It also provides taxpayers with a mechanism to flag discrepancies through the AIS portal.
When assets are already reported
If the foreign assets and related income appearing in AIS were correctly disclosed in the ITRs for the relevant years, there is nothing more to do. Do not report the same CY2022-24 assets again merely because they now appear in AIS.
However, if any of these assets continued to be held during CY2025, they must still be disclosed in Schedule FA of the current AY2026-27 return.
Think of the AIS information as a checklist to verify your past filings—not as a fresh reporting requirement.
Information is new to me
If you discover a foreign asset or foreign income that was never reported in your earlier ITRs, first determine whether there is an associated tax liability.
If you missed reporting foreign income, such as dividend or interest, you should consider filing a revised return, if the deadline is still open.
An ITR-U can now be filed for up to 4 years from the end of the relevant assessment year. However, it comes at a cost. Apart from paying the additional tax and interest on the omitted income, taxpayers must also pay an additional tax.
The additional tax is 25% of the aggregate tax and interest liability if the ITR-U is filed within 12 months from the end of the relevant assessment year, 50% if filed in the next 12 months, 60% if filed in the third year, and 70% if filed in the fourth year. In effect, the longer the delay, the higher the cost of regularizing the omission.
The additional tax may sound harsh, but it is still lower than the penalties under the Black Money Act for non-disclosure of foreign income. A taxpayer will pay a flat 30% tax on the dividend and may also face a ₹10 lakh penalty for each year of non-disclosure until the assessment order is passed. Filing an ITR-U would therefore be a better option.
The most common income, that will prop up in AIS, that most taxpayers miss is dividends from foreign shares. These are generally small payouts that are reinvested by the broker, and hence go unnoticed by the account holder. But, not disclosing even a small foreign income invites equally harsh penalties.
If you only failed to disclose a foreign asset—but not any associated income—an ITR-U is not an option.
“An updated return cannot be filed merely to correct a disclosure without any additional income, as ITR-U is intended for reporting additional income,” said Himank Singla, partner at S B H S & Associates, Chartered Accountants. “In such a case, if the time limit and legal conditions permit, the taxpayer may seek correction through rectification under section 154 to incorporate the omitted Schedule FA disclosure.”
In any case, you cannot disclose foreign income or assets from previous years in your current year's ITR. Only assets and income between 1 January 2025 and 31 December 2025 should be reported in this year's return.
I’ve reported foreign assets but information in AIS is incorrect
If the information displayed in AIS is incorrect, incomplete or does not belong to you, don't ignore it—even if it relates to an earlier year.
The CBDT's user guide allows taxpayers to submit feedback against each transaction using the Transaction Sequence Number (TSN). You can specify whether the information is correct, incorrect, partially correct or does not pertain to you, along with remarks explaining the discrepancy.
While an incorrect historical entry may not directly affect your current ITR, submitting feedback creates a record with the department and may help prevent future compliance notices or disputes, Singla said.