Home / Money / Personal Finance /  ROR has to report foreign assets in the ITR

My son is a non-resident indian. He is thinking of buying a house in his resident country. Is it necessary for him to show it in his Income Tax Return (ITR) here?

   —Name withheld on request

 

Under the India Income tax (IT) law, there is a requirement to report all foreign assets in the ITR if the individual qualifies as “resident and ordinarily resident" (ROR) of India during the relevant financial year. Also, the income earned from such foreign assets during the relevant financial year along with the nature of income and head of income under which such income has been offered to tax in the ITR needs to be reported in relation to each foreign asset.

The foreign assets which are to be reported include foreign bank accounts, financial interests, immovable property, accounts in which an individual has signing authority, trusts, any other capital asset held by the individual outside India. One has to be very careful in reporting foreign assets/ income in the ITR. Any omission or inaccurate particulars may invite additional taxes, interest and penal consequences under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Assuming that your son does not qualify as “resident and ordinarily resident" of India during the relevant financial year, he is not required to report the house outside India in the ITR. If your son qualifies as “resident and ordinarily resident", he may choose either ITR-2 (if there is no business income) or ITR-3 (for business income) to report foreign assets and foreign income.

 

I am a British citizen and  plan to work from India. I withdraw salary from a company in the UK and taxes will be deducted at source. Would I have to pay tax in India too?

—Name withheld on request

Salary income for services rendered in India will be taxable irrespective of the location of the payroll. Assuming that you don’t have an employer in India, you will be required to pay advance tax in four installments or before the filing of ITR by way of self-assessment tax along with interest for late deposit of advance tax and self-assessment tax by 31 July following the end of the financial year.

You may claim benefits in the UK under the double taxation avoidance agreement between India and the UK to avoid double taxation there.

Sonu Iyer is tax partner and people advisory services leader, EY India.

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