July 13: The Central Board of Direct Taxes (CBDT) has taken a significant step by enabling the reporting of information received under the Automatic Exchange of Information (AEOI) and Common Reporting Standard (CRS) framework in the Annual Information Statement (AIS). This reform represents an important milestone in strengthening India’s tax administration while aligning it with global standards of financial transparency. Under the OECD’s CRS framework, more than 100 countries automatically exchange financial account information relating to non-resident taxpayers. With this integration, overseas bank balances, interest income, dividends, investment proceeds and other reportable foreign financial assets will now be reflected in Part E of the AIS, enabling taxpayers to verify and reconcile their disclosures
According to Saurabh Sanyal , Secretary General, ASSOCHAM, this initiative bridges a critical information gap by allowing tax authorities to cross-verify foreign asset disclosures with independently sourced international data.
The reform is expected to improve voluntary compliance, reduce inadvertent reporting errors, broaden the tax base without increasing tax rates, and promote a fair and transparent business environment. It will also facilitate risk-based tax administration, reducing unnecessary scrutiny for compliant taxpayers while enhancing the efficiency of enforcement, said Dr. S P Sharma, Chief Economist, ASSOCHAM
ASSOCHAM advises all individuals and corporates with overseas financial assets to carefully review Part E of the AIS for Assessment Year 2024–25 onwards, reconcile the information with their books of accounts, FEMA disclosures and Schedule FA of the Income Tax Return, and proactively rectify any discrepancies through updated returns wherever necessary.
ASSOCHAM welcomes this progressive reform and urges the CBDT to issue detailed operational guidance along with a robust grievance redressal mechanism for cases involving inaccurate reporting by foreign financial institutions. Greater transparency, supported by effective taxpayer facilitation, will strengthen compliance, enhance investor confidence, and reinforce India’s commitment to global best practices in tax governance and ease of doing business.