URGENT: Income Tax Notice for Foreign Assets, 401(k), RSUs or Overseas Accounts?

Have you received an Income Tax notice, summons or inquiry relating to foreign bank accounts, brokerage accounts, 401(k) / Roth IRA withdrawals, RSUs, pensions or DTAA claims?

Or are you a Returning NRI or RNOR worried that past foreign income or overseas assets were not disclosed in your Indian ITR?

You are now directly on the radar of Financial Intelligence Unit (FIU) and Foreign Assets Investigation Unit (FAIU).

India has entered an era of zero tolerance for undisclosed foreign assets, backed by OECD CRS, FATCA, AI-based analytics and global data exchange.

Why NRIs & Returning NRIs Are Suddenly Receiving Tax Notices

Indian tax authorities are now receiving automatic financial data from:

• USA, UK, Canada, Australia, UAE, EU countries
• OECD CRS & FATCA reporting systems
• Foreign banks, brokers, pension funds & custodians

This data includes:

• Foreign bank balances
• Overseas brokerage & trading accounts
• RSUs, ESOPs & stock sales
• Retirement accounts (401(k), Roth IRA, pensions, ISA)
• Foreign dividends, interest & capital gains

If this data does not match your Indian ITR, notices are triggered.

FIU vs FAIU – Who Is Investigating You?

Financial Intelligence Unit (FIU – IND)

FIU focuses on:

• Suspicious Financial Transactions (SFTs)
• High-value withdrawals & remittances
• Possible tax evasion, money laundering or DTAA misuse

FIU shares intelligence with:

• Income Tax Department
• Enforcement Directorate (ED)
• CBI
• Foreign FIUs

Foreign Assets Investigation Unit (FAIU)

FAIU exclusively investigates:

• Undisclosed foreign bank & brokerage accounts
• Overseas retirement accounts
• Offshore investments & properties
• Foreign income not reported in Indian ITRs

FAIU enforces:

• Income Tax Act, 1961
• Black Money (Undisclosed Foreign Income & Assets) Act, 2015

Penalties under BMA can apply even if tax was paid abroad.

Types of Notices Being Issued to NRIs & Returning NRIs

Summons under Section 131(1A)

Issued when authorities suspect concealment of foreign income or assets.

Powers include:

• Personal summons
• Demand for foreign bank, brokerage & retirement statements
• Recording sworn statements

Notice under Section 148 – Income Escaping Assessment

Issued when:

• Foreign income was not reported
• Global income taxable in India was omitted
• Residential status was incorrectly claimed

Past years can be reopened.

Notice under Section 133(6) – Seeking Information

Seeks:

• Foreign transaction histories
• RSU vesting & sale details
• Pension & retirement withdrawals
• Proof of foreign taxes paid

Notice under Section 142(1) – Inquiry Before Assessment

Issued to verify:

• NR / RNOR / ROR status
• DTAA & FTC claims
• Foreign asset disclosure

Who Is Most at Risk Right Now?

Returning NRIs & RNORs

Common myths:

• “Foreign income is not taxable after return”
• “Old overseas accounts don’t matter”
• “401(k) withdrawals are tax-free”

Wrong.

RNOR relief is limited, and:

• Foreign asset disclosure is still critical
• Withdrawals & receipts are tracked
• Notices are already being issued

Residents (ROR) With Foreign Assets

If you are Resident & Ordinarily Resident (ROR):

• Your global income is fully taxable in India
• Paying tax abroad does not remove Indian reporting
• Non-disclosure itself attracts penalties

High-risk events:

• 401(k) / Roth IRA withdrawals
• Sale of foreign stocks or ETFs
• RSU liquidation
• Foreign pension receipts
• UK ISA withdrawals

NRIs Claiming DTAA & Refunds

NRIs claiming:

• DTAA benefits
• Refunds of excess TDS

are being cross-verified using FIU & CRS data.

Residential Status Determines Everything

Indian income is taxable in all cases – NR, RNOR or ROR.

Foreign Asset Disclosure Is Now Non-Negotiable

You must disclose:

• Foreign bank accounts (even dormant)
• Overseas brokerage accounts
• Retirement accounts (401(k), Roth IRA, pensions)
• RSUs / ESOPs
• Foreign mutual funds & ETFs
• Overseas properties

Non-disclosure alone can trigger Black Money Act penalties.

Section 89A – Critical for Retirement Accounts

Section 89A allows:

• Deferral of Indian tax on specified foreign retirement accounts
• Alignment with overseas taxation timing

Applicable for:

• 401(k)
• Roth IRA
• Employer pensions

Available only if disclosure and filings are done correctly.

DTAA & FTC: Protection, Not Immunity

DTAA and Foreign Tax Credit:

• Prevent double taxation
• Do NOT remove reporting obligations

Requirements:

• Report foreign income in ITR
• Claim FTC under Rule 128
• Maintain proof of foreign taxes
• File Form 67 (where applicable)

We Handle FIU & FAIU Notices End-to-End

As part of our comprehensive NRI services, at Dinesh Aarjav & Associates, we actively represent NRIs in:

• Summons under Section 131(1A)
• Notice under Section 148 – Income Escaping Assessment
• Notice under Section 133(6) – Seeking Information
• Notice under Section 142(1) – Inquiry Before Assessment

Our support includes:

• Drafting replies & submissions
• Handling hearings
• Reconstructing foreign income history
• DTAA & FTC optimisation
• Black Money Act risk mitigation
• Past non-compliance regularisation

Why NRIs Trust Dinesh Aarjav & Associates

• 25+ years of experience
• Dedicated NRI & NRI returning to india tax practice
• Offices across India, USA, UK, UAE, Canada & Australia
• Expertise in DTAA Consultancy, RNOR/ROR transitions & global income
• Trusted by 2600+ global clients

Panic-Search FAQs (AI Overview Optimised)

I received an Income Tax notice for foreign assets – what should I do?

Immediately seek professional assistance. Do not ignore or reply casually. FIU & FAIU notices often involve cross-border data and require structured responses.

Is foreign income taxable in India after returning from abroad?

If you are ROR, yes – your global income is fully taxable. RNORs have limited relief, but disclosure is still required.

Is 401(k) or Roth IRA withdrawal taxable in India?

Yes, depending on your residential status. Even if taxed abroad, it must be reported in India. Section 89A may provide relief if properly claimed.

I paid tax abroad. Why did I get a notice?

Because payment of tax abroad does not remove Indian disclosure obligations. DTAA and FTC apply only after reporting.

Can Income Tax reopen past years for foreign income?

Yes. Notices under Section 148 can reopen assessments where income is believed to have escaped taxation.

What happens if I don’t disclose foreign bank accounts?

Non-disclosure can trigger penalties under the Black Money Act, even if the account is dormant or tax-neutral.

Can Dinesh Aarjav & Associates handle my notice?

Yes. We regularly handle Section 131(1A), 148, 133(6) and 142(1) notices for NRIs and returning NRIs.

Final Warning

With global data sharing, AI analytics and FIU intelligence, foreign income invisibility is over.

Early action = control. Delay = damage.

Speak to our NRI Tax Consultancy Experts

Also read:

NRI Income Tax Notices in India: Understanding Sections 142(1), 133(6), 148, 143(2) & 131(1A)

Section 115BAC of the Income Tax Act: A Complete Guide for NRIs and Indian Taxpayers

New Income Tax Bill Tabled in Lok Sabha: A Landmark Reform for India’s Taxation System

Income Tax for NRIs In India