Why in the news
As overseas investing under the Liberalised Remittance Scheme (LRS) grew, residents were urged to report foreign holdings correctly in their income-tax returns.
Key facts
- Return due date: 15 September 2025.
- Form 67 (foreign tax credit): file electronically by 31 December 2025.
- Revised return: by 31 December 2025; updated return: within 4 years if it raises tax liability.
- Capital losses carry forward 8 years if the return is timely.
| Schedule | Content |
|---|
| FA | All foreign assets, even dormant ones |
| FSI | Foreign dividends, interest, gains |
| TR | DTAA tax relief claim |
| CG | Capital gains or losses on foreign equity |
| OS | Other foreign income |
| TCS | Credit when LRS exceeds ₹10 lakh a year |
Tax rules
- Gains on holdings under 24 months follow the slab rate; above 24 months, 12.5% without indexation plus cess and surcharge (from 23 July 2024).
- Dividends follow the slab rate.
- Short-term loss can offset any gain; long-term loss only long-term gains.
| Default | Consequence |
|---|
| Hiding foreign assets or income | Up to ₹10 lakh |
| Misreporting | Up to 200% of tax due |
| Serious cases | Prosecution |
Common mistakes
- Omitting foreign items, skipping FTC claims, unreconciled TCS, wrong currency conversion.
- Keep TCS certificates, LRS/ODI forms, SWIFT messages, broker statements and foreign tax receipts.
Exam angle
- Foreign tax credit form: Form 67.
- Long-term cut-off: 24 months.