How to report foreign stocks in your income tax returns

Taxpayers must declare all foreign assets, including stocks, in their income tax return (ITR). Failure to do so may result in scrutiny by the tax department and penalties of up to INR10 lakh ($13,531) for each year that assets are not declared. Foreign stocks must be declared every year, and dividends from foreign shares are taxed according to the Indian tax slab rates. Capital gains from foreign stocks sold after two years are taxed at a rate of 20% with indexation benefits in India, while short-term capital gains are taxed according to the individual's income tax slab rates.

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