The Income Tax Department is set to issue SMS and email alerts to around 25,000 individuals flagged as “high-risk” for failing to disclose foreign assets in their income tax returns (ITRs) for Assessment Year (AY) 2025-26, according to sources.
These “high-risk” cases have been identified using data received from foreign jurisdictions under the Automatic Exchange of Information (AEOI) framework.
As part of its ongoing ‘nudge’ campaign, the Central Board of Direct Taxes (CBDT) will initially reach out to these 25,000 individuals, urging them to file revised ITRs by December 31, 2025, to avoid penal consequences.
The second phase of the campaign, beginning mid-December, will widen its scope to cover more taxpayers to strengthen overall compliance.
Sources said that big corporates whose employees hold undisclosed foreign assets have also been brought into the awareness drive, along with industry bodies, ICAI, and various associations.
Separately, the I-T department stated: "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 Black Money Act imposes a penalty of Rs 10 lakh for non-disclosure of foreign assets, in addition to a 30 per cent tax and a penalty amounting to 300 per cent of the tax payable.
Last year, the department had similarly reached out to selected taxpayers flagged by foreign jurisdictions under AEOI for holding undisclosed foreign assets in AY 2024-25. This nudge initiative prompted 24,678 taxpayers — including many who did not receive direct communication — to revise their returns and declare foreign assets worth Rs 29,208 crore, along with foreign-source income of Rs 1,089.88 crore.
According to sources, up to June 2025, the department has assessed nearly 1,080 cases, generating tax demands totalling Rs 40,000 crore.
They added that searches have been conducted in Delhi, Mumbai, and Pune based on CRS data and spontaneous information related to investments in Dubai, leading to the detection of undisclosed foreign assets and income running into several hundreds of crores.
The CBDT continues to receive information on foreign financial assets of Indian residents under the Common Reporting Standards (CRS) and from the United States via the Foreign Account Tax Compliance Act (FATCA). This information, officials said, helps identify discrepancies and guide taxpayers toward accurate and timely compliance.
The ongoing campaign is aimed at ensuring proper reporting in Schedule Foreign Assets (FA) and Foreign Source Income (FSI) in ITRs. Accurate reporting of foreign assets and income is mandated under the Income-tax Act, 1961, as well as the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.