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ITR for People Receiving Foreign Income and Assets: Focus on Conversion & Reporting

CA Umang Jain
18 hours ago
3 min read

Overview

Indian residents receiving salary, stock benefits, dividends, or capital gains from foreign entities must report such income and assets in their Income Tax Return (ITR). Key obligations include precise currency conversion using SBI TTBR, accurate disclosure in relevant ITR schedules, and adherence to international information-exchange standards for tax transparency.

ITR Filing for Employees Receiving Foreign Income and Assets: Focus on Conversion & Reporting

Currency Conversion Using SBI TTBR

Nature of Income / Reporting Requirement	Conversion Rule (SBI TTBR)	Illustration
Salary, Business Income, Other Sources	TTBR on last day of month preceding receipt / due, whichever is earlier	USD 1,000 salary on July 10, 2025 → Use SBI TTBR as on June 30, 2025
Capital Gains on Foreign Assets	TTBR on last day of month preceding transfer date	Foreign equity sold on July 25, 2025 → Use June 30, 2025 TTBR
Foreign Assets Disclosure (Schedule FA)	TTBR as on: date of peak balance, date of investment, or closing date of calendar year (31 Dec)	As on 31 Dec for Calendar Year; e.g., AY 2024‑25 refers to 1 Jan–31 Dec 2023

Note: AY 2024‑25 calendar year ending on 31 Dec 2023 is the period used for foreign asset disclosures.

Tax Transparency: CRS, FATCA & Disclosure Schedules

A. International Frameworks

Under CRS (OECD) and FATCA (US), India receives data from foreign financial institutions on Indian residents' foreign accounts, encompassing details such as balances, income, and account-holder identifiers.

B. ITR Disclosure Obligations

Indian residents must disclose foreign income and assets across the following schedules:

Schedule FSI (Foreign Source Income) – report income from foreign sources under the relevant heads (e.g., salary, dividends); specify country ISD code, TIN/passport, DTAA article, and maintain Form 67 for claiming foreign tax credit.
Schedule TR (Tax Relief) – summarise foreign tax paid and relief claimed per country, including TIN, tax paid, relief claimed, and the legal provision (Sections 90, 90A, or 91).
Schedule FA (Foreign Assets) – disclose details for various asset categories (A1–G) such as depository accounts, equity, immovable property, insurance, trusts, and other foreign sources. Provide metrics like peak/closing values and income derived, converted using SBI TTBR.

C. Consequences of Non-Disclosure

Failure to disclose foreign income or assets can lead to penalties and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

D. Benefits of Transparency

- Establishes compliance and credibility with tax authorities- Ensures legal protection from penalties- Enables double taxation relief- Contributes to national development via correct tax remittance

E. Revised Return Opportunity

For AY 2024‑25, taxpayers had the option to file revised returns up to 15 January 2025 to rectify omission of foreign disclosures and claim applicable reliefs.

Practical Recommendations for Tax Professionals

Use correct SBI TTBR for each income/event type consistently.- Retain documentation: TTBR notifications, bank statements, broker statements, payment advices.- Ensure accuracy across schedules: FSI, TR, FA.- Review CRS & FATCA notices that may be issued by the Department.- Leverage revised returns promptly in case of disclosure gaps.

Conclusion

Compliance in ITR filing for foreign-sourced income and assets is no longer optional—it is mandated by law and monitored globally. Employing the SBI TTBR for conversion and fulfilling foreign disclosure requirements under Schedules FSI, TR, and FA not only ensures due diligence but also shields the taxpayer from legal and reputational risks. Enhanced transparency supports national fiscal integrity and tax governance.

Regards

CA Umang Jain

+91 96323-32850

umang@caumang.com