The Income Tax department plans to ‘nudge’ defaulters identified as “high-risk” individuals and ask them to disclose their foreign assets in revised income tax returns (ITRs) for the Assessment Year (AY) 2025-26, it said on Thursday.
The department will start contacting such taxpayers via SMSs and emails from November 28, advising them to file the ITR by December 31, 2025, to avoid penal consequences.
“Analysis of AEOI information for FY 2024-25 (CY 2024) has identified high-risk cases where foreign assets appear to exist but have not been reported in the ITRs filed for AY 2025-26,” the I-T department said in a statement.
The Central Board of Direct Taxes (CBDT) receives information relating to foreign financial assets of Indian residents from partner jurisdictions pursuant to Common Reporting Standards (CRS) and from the United States under the Foreign Account Tax Compliance Act (FATCA).
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“This information assists in identifying potential discrepancies and guiding taxpayers towards timely and accurate compliance”, it added.
Last year’s action by the department on targeted select taxpayers who had been reported by foreign jurisdictions under the Automatic Exchange of Information (AEOI) framework as holding foreign assets that were not disclosed in their Income Tax Returns (ITRs) for AY 2024-25 led to 24,678 taxpayers (including several who were not sent SMS/emails) revisiting their ITRs and disclosing foreign assets amounting to ₹29,208 crore, along with foreign-source income of ₹1,089.88 crore, in AY 2024-25.
The campaign aims to facilitate correct reporting in Schedule Foreign Assets (FA) and Foreign Source Income (FSI) in ITRs.
Accurate disclosure of foreign assets and income is a statutory requirement under the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
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