About this plan
This plan is tailored for Resident Indians who have income from foreign sources such as salary from overseas employment, foreign bank interest, foreign shares, ESOPs, or rental income from property abroad.
Under Indian tax laws, global income is taxable for Resident and Resident but Not Ordinarily Resident (RNOR) individuals. Accurate reporting is essential to avoid scrutiny, penalties, or double taxation.
This plan helps ensure full compliance with:
Indian Income Tax laws
Foreign Asset disclosure (Schedule FA)
DTAA (Double Tax Avoidance Agreement) benefits
Services Included
- Determination of residential status (Resident / RNOR)
- Tax computation of Indian and foreign income
- Reporting foreign salary, bank interest, rental income, dividends, etc
- Disclosure of foreign assets and financial interests in Schedule FA
- Preparation and e-filing of applicable ITR (typically ITR-2 or ITR-3)
- Support for claiming TDS and advance tax credits
- Guidance on DTAA relief and tax credit claims
Who Should Buy
How It's Done
This plan is equipped with end-to-end online fulfillment via our expert. No hassle, 100% Digital.
3 Days Estimate
- Upload Documents on Vault
- Review computation sheet
- Get ITR-V after e-filing
Documents Required
FAQs
Who is considered a Resident having Foreign Income?
A person who qualifies as a Resident and Ordinarily Resident (ROR) in India and earns income from sources outside India is considered a resident having foreign income.
Which ITR form should be filed for foreign income?
- Generally, ITR-2 or ITR-3 is applicable, depending on the source and nature of income.
- ITR-2 is for individuals not having business income.
- ITR-3 is for individuals having income from business or profession.
What types of foreign income should be reported in the ITR?
- Foreign Salary
- Foreign Interest Income
- Foreign Dividends
- Rental income from property abroad
- Capital gains from sale of foreign assets
- Income from Foreign Business or Profession
- Any other income earned outside India
Is disclosure of foreign assets mandatory?
Yes, if you are an ROR, it is mandatory to report all foreign assets and foreign bank accounts held during the financial year in the Schedule FA of the ITR.
Is Double Taxation Relief available on foreign income?
Yes, relief can be claimed under:
- Section 90 – If India has a DTAA (Double Taxation Avoidance Agreement) with the foreign country
- Section 91 – If there is no DTAA, but tax was paid in the foreign country
Do I need to convert foreign income into Indian Rupees?
Yes, all foreign income must be converted into INR using the prescribed RBI/SBI exchange rate as on the last day of the financial year.
What documents are required for reporting foreign income?
- Foreign income statements
- Salary slips or Form W-2 (for US income)
- Foreign bank account statements
- Tax deduction or payment proof in foreign country
- Proof of ownership of foreign assets
- DTAA certificate (if applicable)
Can I file ITR if I only have foreign income and no Indian income?
Yes, as an Indian resident, global income is taxable in India, so even if you only have foreign income, filing ITR is mandatory.
What happens if I fail to disclose foreign income or assets?
Non-disclosure may attract penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, including heavy fines and prosecution.
Can I get credit for tax paid in a foreign country?
Yes, by filing Form 67 before the due date of filing the return, you can claim Foreign Tax Credit (FTC) for taxes paid abroad.
Which schedule in ITR captures foreign income?
- Schedule FSI – Details of income from outside India and tax relief
- Schedule TR – Details of tax relief claimed under Section 90/91
- Schedule FA – Details of foreign assets and accounts
Is interest earned on foreign bank accounts taxable in India?
Yes, interest income earned in foreign bank accounts is fully taxable in India if you are a Resident and Ordinarily Resident (ROR). It must be disclosed under “Income from Other Sources” and reported in Schedule FSI and Schedule FA.
If I have foreign shares or investments, how do I report them?
- Report capital gains/losses from sale in Schedule CG
- Report dividend income in Schedule OS
- Also disclose these assets in Schedule FA
Is revised return covered under the plan?
Revised return filing on account of incorrect information provided by the assessee during the original return filing shall not form part of the plan.
Are ESOPs or RSUs received from a foreign employer taxable in India?
Yes:
- At the time of vesting/exercise – considered a perquisite under salary
- At the time of sale – capital gains apply
Both need to be disclosed accordingly in your ITR.
What happens if I mistakenly file ITR-1 despite having foreign income?
ITR-1 is not applicable for residents having foreign income or foreign assets. The return may be considered defective under Section 139(9) and may lead to a notice. You should file a revised return using the correct ITR form.
If I am filing my belated returns on TaxSmooth, who is supposed to bear the penalty?
Please note that when a taxpayer files their belated returns on TaxSmooth, the penalty, which can be up to Rs.5,000, has to be borne by the taxpayer. TaxSmooth will not be responsible for the penalty that you are liable to pay to ITD.