Overseas holdings under scrutiny: IT dept flags non-disclosure; taxpayers get last chance to revise ITRs- get details

The Income Tax department will begin sending SMS and email alerts from November 28 to about 25,000 individuals flagged as “high-risk” for not disclosing foreign assets in their income tax returns (ITRs) for Assessment Year 2025–26, PTI reported citing sources. The cases were shortlisted on the basis of data received from foreign jurisdictions under the Automatic Exchange of Information (AEOI) framework.Sources told PTI that this first phase of the ‘nudge’ campaign by the Central Board of Direct Taxes (CBDT) will advise taxpayers to file revised returns by December 31, 2025, to avoid penal consequences. A second phase, starting mid-December, will broaden the campaign to include additional cases as part of efforts to improve compliance.Industry bodies, ICAI and corporate employers whose staff may hold undisclosed foreign assets have also been approached to sensitise taxpayers, the sources added.In a separate statement, the I-T department said: “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.”Under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, non-disclosure attracts a penalty of Rs 10 lakh, along with a 30 per cent tax and a 300 per cent penalty on the tax payable.Last year, the department issued similar nudges to select taxpayers reported by foreign jurisdictions under the AEOI framework. That exercise led 24,678 individuals — including some who did not receive alerts — to revisit their ITRs and disclose foreign assets worth Rs 29,208 crore and foreign-source income of Rs 1,089.88 crore for AY 2024–25.Sources said that until June 2025, the department had assessed around 1,080 cases, raising tax demands totalling Rs 40,000 crore. They added that searches carried out in Delhi, Mumbai and Pune — based on data from Common Reporting Standards (CRS) and spontaneous exchanges on investments in Dubai — uncovered undisclosed foreign assets and income running into several hundreds of crores.CBDT receives information on the foreign financial assets of Indian residents through CRS and from the United States under the Foreign Account Tax Compliance Act (FATCA), which helps identify discrepancies and guide taxpayers towards timely compliance. The campaign is aimed at ensuring accurate reporting in Schedule Foreign Assets (FA) and Foreign Source Income (FSI) in ITRs, a statutory requirement under the Income-tax Act, 1961, and the Black Money Act.