The Income Tax department is gearing up to send SMS and emails to approximately 25,000 individuals suspected of not disclosing their foreign assets in their income tax returns for the Assessment Year 2025–26. These individuals have been flagged as “high-risk” cases following the exchange of information with other countries under international data-sharing agreements.
Tax authorities analyzed data obtained from foreign jurisdictions through the Automatic Exchange of Information (AEOI) system, enabling countries to exchange details of offshore financial accounts held by their residents. Utilizing this information, the department identified multiple cases where foreign assets were apparent but not reported in the filed Income Tax Returns (ITRs).
To enhance compliance, the Central Board of Direct Taxes (CBDT) will initiate the first phase of a proactive ‘nudge’ campaign by sending notifications. Taxpayers will be advised to amend their ITRs by December 31, 2025, to evade penalties.
The subsequent phase of the campaign, commencing in mid-December, will encompass a broader spectrum of individuals. Besides, the department has engaged with prominent companies to address employees who might possess undisclosed foreign assets. Various industry bodies, including ICAI, have been enlisted to raise awareness and assist taxpayers.
According to an official statement, the received information aids in identifying discrepancies and encourages accurate reporting of overseas assets under Schedule Foreign Assets (FA) and Foreign Source Income (FSI).
Non-disclosure of foreign assets entails severe consequences. Under the Black Money Act, failure to report foreign assets can result in a penalty of Rs 10 lakh, a 30% tax levy, and an additional penalty amounting to 300% of the tax liability.
The legislation is aimed at curbing undisclosed foreign income and assets held by Indian residents.
A prior ‘nudge’ campaign conducted last year led 24,678 taxpayers to review their ITRs for AY 2024–25, disclosing foreign assets totaling Rs 29,208 crore and foreign-source income exceeding Rs 1,089 crore.
Between April and June 2025, about 1,080 cases were evaluated, resulting in tax assessments nearing Rs 40,000 crore. Additionally, the department conducted searches in Delhi, Mumbai, and Pune, revealing undisclosed foreign investments worth hundreds of crores.
In essence, this initiative seeks to encourage taxpayers to transparently report their assets in a timely manner, thereby helping them avoid hefty penalties and fortifying the overall compliance framework.