In case Ordinarily Resident in India held any asset located outside India at any time during the preceding year. Then the person is liable to file an ITR in India, as per the Income Tax Act,
A person is “ordinarily resident in India” if they have lived in India for at least two out of every ten financial years. Or, if they have lived for 730 days or more in the previous seven financial years.
If you are a Normal resident in India and beneficially possess or are a beneficiary of overseas assets. Then, you must report the details in ITR Schedule FA.
A ‘beneficial owner’ of a foreign asset, refers to someone who has provided the consideration for the foreign asset; whether directly or indirectly, for the immediate or future profit of himself or anybody else.
A ‘beneficiary,’ on the other hand, is someone who, despite not having paid for the asset, benefits from it during the financial year.
The tax department is looking for all the information regarding the peak balance of an account/ investment during the accounting period; the closing balance/ closing value of an investment at the end of the year; interest paid or credited in a foreign bank account; gross proceeds from the sale of an investment in Indian currency; the cost of immovable property; and the income derived from it, among other things.
It’s important to note that Schedule FA just demands information about overseas assets; the income earned from them must be reported to the IRS under the appropriate ITR head/schedule (i.e. capital gain, house property, other sources, etc.)
Thus, to prevent legal complications, It is in the best interests of residents to disclose their global assets and income. Even if they did not receive those assets in India.