By Sonu Iyer
The July 31 deadline for individual income tax return filing is knocking on our doors. As the deadline approaches, individuals rush to get the last pieces of the puzzle in place.
Governments the world over are trying to build more transparent taxation systems and curb corruption. Indian revenue authorities are also creating mechanisms to track income from different sources, including those outside India. The Income Tax Act, 1961, already provides that an individual who qualifies as Resident and Ordinarily Resident (ROR) in India would be taxable on his worldwide income. The authorities have modified the manner and detail in which such income has to be reported in the income tax return (ITR) forms used for filing returns. A new schedule called FSI has been introduced in the relevant ITR forms, where an individual is required to report income earned abroad separately.
Further, an individual is also required to show the break-up of such income from abroad under the heads of 'income from salary', 'income from house property', 'capital gains income', 'business income' and 'other sources income'. This income also needs to be bifurcated into the foreign income to which provisions of a tax treaty apply. A Tax Identification Number (TIN) where the tax has been paid in a foreign country should also be provided. The passport number of the payer is to be mentioned if a TIN has not been allotted in that foreign country.