Positive impactForex
NRI's ₹3.41 crore FCNR deposits flagged as unexplained money after tax officer mistook yen for rupees, ITAT gives relief
Mint 2 hrs ago·18 Oct 2026, 4:05 pm
A non‑resident Indian (NRI) had an income‑tax addition of about ₹3.41 crore placed on her return after the tax officer mistakenly treated the amount shown in Japanese yen as rupees. The deposits were in a foreign currency non‑resident (FCNR) account, and the error was uncovered when bank records proved the funds were actually yen, not rupees.
The case highlights how a simple conversion mistake can trigger a large tax liability for NRIs holding foreign‑currency assets. It also underscores the need for clear documentation and careful review of currency figures when filing returns, especially for FCNR deposits that are denominated in foreign money.
Investors should ensure that all foreign‑currency transactions are correctly reported and keep supporting bank statements handy. Tax authorities may tighten verification of FCNR accounts, so monitoring any new guidance on currency reporting and staying in touch with tax advisors could help avoid similar issues.
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