Form 6 – disclosure of Foreign Assets
Form 6 is a form used to declare the undisclosed foreign earnings and foreign assets of an individual while filing the tax returns.
This form comes under Section 59 of the Black Money Act which makes it mandatory to disclose any undisclosed foreign income and assets.
This form is very simple to fill. Let’s try to evaluate the contents of the form so that it becomes easy for us while filing our Tax Returns.
Following are the essentials that need to be filled in the form:
Even when an individual e-file his tax return he has to disclose his foreign income / assets. If an individual has foreign assets then he must file his taxes using form ITR-2. It comes with the title as quoted – “For Individuals and HUFs not having Income from Business or Profession.” This form is well structured with the aim of maintaining transparency in the source of income of an NRI/ person with foreign assets or income.
There are 19 Schedules that encourage the tax payer to discuss and provide details/proof about various aspects of their income. Out of these 19 ‘schedules’, Schedule FA Schedule FSI and Schedule TR are pertaining to Foreign Income and assets held outside India.
Example: Schedule FSI & TR is used by persons working abroad, having spouse and children or parents in India, to declare salary and taxes paid in the country where they work.
Amongst the above three noted schedules, Schedule FA is to be filled by the resident assessee. Details of foreign bank accounts including the one which the assessee has signing authority, the opening date of the account, financial details of any nature like interest accrued and immovable property/assets abroad are declared in this important schedule.
[ Read: Foreign Bank Account Reporting ]
The details of the above items are usually discussed in detail with sufficient documentation in the annexure provided along with Form 6. Filling the annexure forms the part of furnishing sufficient information supporting the assets declared thus enforcing transparency in the earnings of a taxpayer. Inaccurate and falsified details will attract a penalty and rigorous punishment as per law.
While we furnish all the details as per the law during filing of returns we must understand the significance of enclosing such details to the government. The reason is simply to curb the money earned by unethical means, which is otherwise known as black money.
The Government of India has passed an act known as the Black Money Act that would help the government find out the populace that avoid tax evasion by means of illegal or immoral ways of business conduct. Also, it would help generate more revenue for the government that will in turn get utilized for the people. Illegal and corrupt practices can be brought a halt by the proper reinforcement of this act.
Thus, money earned will be regulated and circulation of the same will help in a growing economy. Transparency will help in knowing the intentions of people and thus maintaining a clear picture of development from the point of view of the law.
However, this venture will fall short if the people fail to co-operate positively. For this, the government should create awareness in the minds of people that the revenue generated will eventually get utilized for the benefit of the people. Also, the danger of unregulated money and its dire effects should be brought to light for creating awareness.
India’s future is dependent on the economic growth and prosperity of the people. Having a chance to grow and let the economy grow without harming the population requires a great effort and the government has recently shown its active interest in this area by enforcing the Black Money Act. The features of this act ensure the vision for a prosperous in the long run. It remains in the hands of the people and the government to act and make this a serious prospect for the future of a flourishing country.