Industry Odisha Bureau, Oct 23: The Income-Tax Department is expected to issue notices over undisclosed foreign property. Data from overseas jurisdictions underpins the move. Meanwhile, the FAST-DS scheme offers a limited window for voluntary disclosure.
Resident Indians holding undisclosed property abroad may soon receive income-tax (IT) notices. The notices are expected over the coming weeks, according to The Economic Times.
An investigation division official reportedly flagged the move, two people told the newspaper. This came during a Wednesday webinar with tax practitioners and auditors.
The department has reportedly gathered data from multiple foreign jurisdictions. Much of it arrived through a channel called spontaneous exchange of information. Under this route, countries share data unprompted if it may interest India. Crucially, it can reveal details of overseas immovable property such as homes.
This differs from the automatic exchange of information, or AEOI. AEOI is a routine data-sharing arrangement between India and several countries. However, it covers only financial assets, such as bank accounts and shareholdings. Stock options and beneficial ownership of offshore trusts also fall within its scope. Real estate therefore falls outside it.
Some property details may also have come through case-specific “information upon request”. The department seeks data from a country after discovering hidden assets during an investigation. Two years ago, it also received a large volume of data on Indian-owned Dubai properties. Dubai has become a sought-after property market in recent years.
The expected notices follow SMS alerts sent to thousands of taxpayers. These messages urged them to report overseas assets under Schedule FA. Schedule FA is the section of income-tax returns for declaring foreign assets. The alerts also pointed taxpayers towards a special disclosure scheme.
That scheme is the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, or FAST-DS. Often described as a mini amnesty, it opened on August 16. It is a one-time window for voluntarily regularising overseas holdings. Eligible assets include foreign stocks, properties, ESOPs, dividends and interest.
Undisclosed assets worth up to ₹1 crore can be regularised under the scheme. This requires payment of 60% by way of tax and penalty. A separate category allows declarations of up to ₹5 crore. This applies to foreign assets acquired with already tax-paid money. It covers residents who invested via the Liberalised Remittance Scheme, or LRS. Returning NRIs who failed to declare foreign accounts also qualify.
Harshal Bhuta, co-founder of Ascentium India, said overseas property buyers are eligible for FAST-DS. He said this could help them avoid penalty and prosecution under the Black Money Law. Yet the response has so far been lukewarm. The ₹5-crore cap and valuation difficulties have reportedly limited uptake.
Chartered accountant Ashish Karundia cautioned that overseas property raises issues beyond income tax. If buying property created an overseas liability, FEMA implications may need examining. FEMA is the Foreign Exchange Management Act, governing cross-border transactions. An unexplained source of funds could also raise money-laundering questions under PMLA. In his view, reporting to the IT department does not cure such breaches.
Owning property abroad is not unlawful in itself. The concern lies with holdings left undisclosed or improperly funded. With notices expected, accurate disclosure has become a pressing priority.
