Now check foreign income & assets data in AIS ahead of ITR filing

This week the Central Board of Direct Taxes (CBDT) started showing foreign assets and income information received under the Automatic Exchange of Information (AEOI) framework, in the AIS of eligible taxpayers. This will enable taxpayers to identify omissions or discrepancies before filing the income tax return (ITR) and reduce the likelihood of notices or subsequent litigation.

Taxpayers must ensure that all foreign assets and financial interests are disclosed in the relevant schedules of the ITR, even where a particular transaction may not yet be reflected in AIS. “Where there are differences between the taxpayer’s records and the AIS, the taxpayer should retain adequate documentary evidence to substantiate the reporting adopted in the return and provide feedback on the same on the AIS portal,” says Neeraj Agarwala, senior partner, Nangia & Company.

Automatic Exchange of Information framework

The AEOI framework functions as an automated international data exchange where foreign financial institutions systematically collect and transmit annual financial account data including peak balances, interest, dividends, and custodial proceeds of Indian tax residents under the Common Reporting Standard (CRS) and Foreign Account Tax Compliance Act (FATCA) protocols.

Sandeep Sehgal, partner-Tax, AKM Global, a tax and consulting firm, says to ensure this intelligence is actionable, the July 2026 CBDT directive mandates that inbound AEOI data must be processed and uploaded into the individual’s domestic AIS within a strict 90-day structural window from the end of the month it is received. “This automated bridge converts raw cross-border compliance streams into immediate, visible pre-filing data on the taxpayer’s portal,” he says.

Taxpayers must carefully navigate the accounting period mismatch, as AEOI data shared under global standards follows the calendar year (January–December), whereas Indian reporting follows the fiscal Tax Year (April–March) under the new Income-tax Act, 2025, requiring meticulous data extrapolation.

If an individual qualifies as a Resident and Ordinarily Resident (ROR) and the AIS reflects AEOI data, he must file ITR-2 or ITR-3 to ensure full disclosure in Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income).

Penalty for non-reporting

By mapping AEOI data directly into the AIS, the tax department has established an automated risk-assessment baseline. The portal uses advanced data analytics to instantly flag mismatches if a taxpayer leaves Schedule FA blank or under-reports global income, automatically triggering systemic scrutiny.

Under Section 43 of the Black Money Act, 2015, a flat penalty of Rs 10 lakh per tax year applies for the non-disclosure or inaccurate disclosure of foreign assets in Schedule FA, alongside potential criminal prosecution.

However, the regulatory framework offers relief under the FAST-DS 2026 framework. Non-immovable foreign assets such as legacy student bank accounts or corporate employee stock option plans (ESOPs) with an aggregate value under `20 lakh are exempt from this Rs 10 lakh penalty and prosecution.

Disclaimer: This article is based on a recent ITAT Pune ruling in a specific case. Judicial decisions are fact-specific, and their applicability depends on individual circumstances. Taxpayers should seek professional advice before relying on this ruling for their own cases.

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