Inclusion of income received abroad is must in IT returns

Arnav PandyaA person who is resident in India has to include income received in any part of the world to their taxable income in order to arrive at their final tax liability. There are a lot of people who often do not include some small items that they might receive abroad for the purpose of taxation and this is not the right thing to do. This makes it essential for every person to ensure that they look at all the receipts that they get and then tally this up for the purpose of completing their tax requirements. The problem in many cases lies with actually recognising that there are receipts that are taxable. Here is a look at some of these small amounts that people might often forget but still needs to be included for the purpose of taxation in India.Bank interestOne of the things that a lot of people have is a savings bank account abroad. This might have been opened for the purpose of transacting in case one was abroad for some work for a short period of time or it could have been opened for the purpose of using the amounts present there for travel or other purposes rather than converting foreign exchange every time one went abroad. In many cases the account is just lying there with some amounts present in it and it could also be that this is being used infrequently. If this is a checking account then it would not earn interest but if this is a savings account then some small amount of interest is likely to have been earned on this amount. Many people simply forget to include the details of the account into their tax workings and the end result is that not only is the income from the account not brought under the tax net but even the account remains unknown to the tax authorities.DividendsIt could also be that the individual has bought some small amount of shares in some foreign country from the funds that they have set aside when working abroad or from some receipts from a foreign country. In this situation the shares are not in their local demat account so this would not be directly visible along with the other investments that are present for the individual. There might also be dividends that are earned on the amounts here. Now this amount of dividend would have to be considered as income that is taxable in India because of the fact that unlike dividend from local companies there is no exemption available for the foreign dividends. This makes it important for the individual to look at the tax impact that this would have suffered in the foreign country and then take this as income in India and also make the necessary adjustment for taxes as required.Small receiptsOften there are some small services or other work that a person might render abroad or to someone who is staying in a foreign country. This might lead to the receipt of some amount as income but it might not be deposited in a local account as it is in a foreign currency. In such a situation this small receipt is actually an income for the individual and it would have to be included in the tax calculation but is often missed out. Even if the amount is small it has to be disclosed so in case this is deposited in a bank account abroad then questions might arise as to what the amount is and why this has not been shown in the tax workings. At a later date this could lead to problems so it is essential that all efforts are made to ensure that the amount is included as income as and when it arises.