A special drive to ‘nudge’ taxpayers to disclose their foreign assets and income has resulted in over 30,000 taxpayers declaring foreign assets worth Rs 29,208 crore and additional foreign income of Rs 1,090 crore, according to government sources. The campaign also made 6,734 taxpayers change their residential status from resident to non-resident.
The Central Board of Direct Taxes (CBDT) launched the compliance-cum-awareness campaign on 17 November 2024, urging taxpayers to declare their foreign assets and income in revised income tax returns (ITRs) for assessment year (AY) 2024-25. As part of the campaign, SMS and emails were sent to 19,501 taxpayers with high foreign account balances or significant foreign income from interest or dividends above a specified threshold. The tax department also organised 30 outreach sessions, seminars and webinars across India, engaging over 8,500 participants directly.
Government sources said approximately 62% of taxpayers approached by the department responded positively, voluntarily revising their ITRs to declare foreign assets and income. The number of taxpayers disclosing foreign assets and income on a voluntary basis has steadily grown from 60,000 in AY2021-22 to 231,452 taxpayers in AY 2024-25.
“This year, due to extensive outreach and awareness efforts, voluntary disclosures witnessed a significant 45.17% growth compared to AY 2023-24,” said a source.
The tax department used the information shared by over 108 countries under the automatic exchange of information regarding foreign accounts and income in the form of interest and dividends earned outside India.
India is one of the early adopters of Common Reporting Standards (CRS) and has been receiving data since 2018 for the calendar year 2016 and onwards. More than 125 countries have agreed to share financial information of individuals linked to other jurisdictions on an automatic basis, including details of accounts held, account balances, dividends, interest received, and gross payments. A similar exchange occurs with the USA under the Inter-Governmental Agreement pursuant to the Foreign Accounts Tax Compliance Act (FATCA), 2010.
“At the heart of this campaign lies the Trust First approach, which prioritises voluntary compliance over enforcement. Instead of immediate verification or intrusive actions, the department has trusted taxpayers first, giving them ample opportunity to make true and complete disclosures of their foreign income and assets,” said a government source.