ITR Rectification or ITR U

[Nanu Arora]

Respected everyone,

Due to some neurological disorder I cannot work and I am solely relying on interest income only from the past few years. The interest income is less than the taxable income and hence NIL tax. I started investing in US stocks through aggregators/platforms available in the market in 2021. In the ITR-2 filed for FY 21-22 there was no taxable income, after taking into account all the deductions and the only source of income is interest income. For the US stocks, schedule FA were to be filed, which the accountant who filed our returns did not file citing for this small amount it is not required. The return was processed later on. The total initial value of the investment as per the data provided by the aggregator is 1.66 Lacs and the peak and closing values were around 4.72 lacs during FY 21-22, there were no capital gains.

For the ITR of FY 22-23 all the FA schedules etc. were filed. The processing is still pending. We will be filling the schedule FA for next years also but the purchase date for most stocks will remain as bought in 2021 which might (or might not cause) issues later on. Now in FY 21-22 there is only dividend income and interest income from US stocks which is less than Rs. 460, combined. This amount is after the 25% tax deducted in the US under the DTAA with India. Even after we show this, after rectifying the return or updating it, there will be no tax impact. Now rectifying or updating it is the right thing to do but some articles say that since amount is small we can leave it and if its done then it will be highlighted to the AO. Is this so? Say we want to correct the return and show schedule FA etc. then are the schedule FA etc. to be shown under ITR Rectification or ITR U? Again the articles on the internet and youtube video tutorial videos seem to be divided between these two alternatives. As we are from a small town so there is not much awareness as in how to file schedule FA among the accountants/ca's here so asking here.

Thanks to Sh. @KASTURI SETHI Ji for your guidance and blessings. Please tag relevant users who can help us here.

Regards

AI Summary

Disclosure of foreign assets: update returns only when additional tax arises, otherwise consider voluntary intimation to tax authorities.
The document discusses omission of Schedule FA for foreign investments and contrasts corrective mechanisms: ITR-U, which requires additional tax/interest (and may trigger section 140B charges) and thus is not available where no extra tax arises; and ITR-R, whose scope may preclude declaring new income and may be limited by portal utilities. Contributors advise against fabricating income to enable ITR-U and suggest either confirming rectification feasibility on the portal or sending a voluntary intimation to the jurisdictional assessing officer to record bona fides and avoid future penalties.