- If you have any foreign assets or foreign income not disclosed in the original ITR filed for A.Y. 2024-25 then you are required to revise the ITR upto 31.12.2024
Do I need to refile for foreign income
I am an Indian freelancer earning through Upwork, and my payments are withdrawn in INR into my savings account. Upwork deducts TDS and GST for each completed job, and I have already accounted for these taxes in my filings. Recently, however, the Income Tax Department has requested individuals with foreign income to refile their income tax returns. I am unsure why refiling is necessary in my case, as I have already filed my returns and even received a tax refund. The TDS deducted by Upwork falls under Section 194O, which applies to registered e-commerce operators in India. Since my earnings are received in INR after currency conversion, I am unclear how this is classified as foreign income. Could you clarify whether I need to refile my income tax returns for foreign income under these circumstances?
Asked 9 days ago in Income Tax
When you say that "Recently, however, the Income Tax Department has requested individuals with foreign income to refile their income tax returns.", what does it mean? Has this been specifically to you or what is its source? If this communication is specifically sent to you, then you should definitely file a revised return, albeit could be with same/ similar details.
However, if this communication is general or some social media platform, its better to ignore since you are saying that you are sure about what have shown in your ITR is correct.
Further, if you receive any income in your account in INR, it does not mean that this is not foreign income. All the money received in India by residents is into INR only since legally you can use only INR for transactions within India. What is important is whether the remitter is resident/ non-resident and the money has been sent thorugh SWIFT system with you as beneficiary.
If you have some EEFC account where this income is first credited in your account (in foreign currency) then you get it converted into INR for your own use, which is a rare case for any resident individual not doing any registered business activity.
Its a long complicated process, irrelevant to the question raised now.
In your case, since you are receiving payments in INR and the income is sourced from an Indian entity (Upwork as an e-commerce operator registered in India), this does not classify as foreign income. The Income Tax Department's recent request for individuals to refile their returns for foreign income typically targets income earned directly from foreign sources or received in foreign currency that might not have been fully reported or misclassified.
Since Upwork deducts TDS under Section 194O, which specifically deals with payments made to e-commerce participants by registered e-commerce operators, your income is treated as domestic source income. Therefore, you should not need to refile your income tax returns for foreign income under these circumstances.
However, the Income Tax Department may have issued this request based on a generic criteria or an error.
Since you're receiving payments in INR and Upwork is an Indian e-commerce operator, your income is treated as domestic, not foreign income. The TDS under Section 194O supports this classification. The Income Tax Department's request to refile may be a general notice targeting unreported foreign income, but in your case, there's no need to refile.
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