WE USUALLY DON'T want to be alarmist but this is one area where taxpayers need to tread with caution. They can no longer afford to be unsure about their foreign income and assets. There is a lot of exchange of information between countries and we will see an exponential rise in the number of notices being sent to taxpayers on this account.

Mis-reporting overseas assets will not be taken lightly by the government. You could be prosecuted under the Black Money Act and the penalty can be as high as `10 lakh for even small errors. Experts say taxpayers who have worked abroad often go wrong when reporting their foreign assets. The employee stock options is often acquired at no cost or be sold out during the year and therefore get missed when you take an account of your assets. Capital assets like jewellery often skips the mind as they do not generate any income. In fact, they may have been bought only as ornaments.

Not just salary and perks, freelancers who receive money from foreign clients need to report this income under the foreign assets schedule. This should also include gifts, which are deemed to be income. Also, all foreign bank accounts -- whether operational or not and even with a tiny balance--need to be reported. You even have to report bank accounts where you are merely a signing authority.

Start collecting details of your foreign assets much before the last date for filing returns.