IT Department Issues ‘Last Warning’ to MNC Employees on Undisclosed Foreign Assets
As the year-end approaches, the Income Tax Department has sent out firm, politely worded notices as “last and final call“. These messages have gone to several multinational companies, including a well-known global consumer healthcare company, a wireless technology leader, and a major US-based semiconductor firm. The tax authorities have asked these companies to ensure that their employees working in India come forward and disclose any foreign assets or income that they may not have reported earlier.
“Data received indicates that 30 of your employees are subject to mandatory reporting for the assessment year 2025 to 26. To ensure confidentiality, the department is not disclosing the specific names of the employees in his email. We request your cooperation in ensuring statutory compliance,” says the department.
Many people do not report their foreign assets because they think it’s not a big deal or believe the tax department will never find out. This is especially common among Indian employees working with multinational companies. Some of them get advice from unqualified tax consultants, who wrongly tell them that things like ESOPs, foreign dividends, or capital gains earned in overseas bank accounts can be safely ignored. Because of such misunderstanding, employees assume that income earned or money held outside India will remain hidden from the Indian tax authorities, which is not true.
The companies are advised to alert employees to the urgency of reporting foreign assets and foreign-sourced income; a failure to spell out the details could trigger assessment proceedings, a fine of Rs 10 lakh and even prosecution under the Black Money Law.
