CHENNAI: The Central Board of Direct Taxes (CBDT) on Thursday launched the second phase of its NUDGE initiative to promote voluntary compliance in reporting overseas assets and income, as the department plans to tap the assets that have not been disclosed during the income tax filings CBDT has identified high-risk cases where foreign assets appear to exist but have not been reported in the ITRs filed for AY 2025-26, stated the Ministry.
“The campaign aims to facilitate correct reporting in Schedule Foreign Assets (FA) and Foreign Source Income (FSI) in ITRs. Accurate and complete 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,” the release said.
From November 28 onwards, the department will issue SMS and email alerts to taxpayers identified through Automatic Exchange of Information (AEOI) data analytics for FY24–25, urging them to review and revise their income-tax returns for AY25–26 by 31 December 2025 to avoid penalties.
The department confirmed that initially select high risk cases of 25,000 (approx.) will be targeted. Income tax Department assessed approximately 1,080 cases, raising demand of Rs. 40,000 crore (approx.) till June 2025.
As per the Black Money Act a penalty of 10 lakh is imposed for non disclosure of foreign assets apart from tax of 30% and penalty of 300% on the tax payable. The first NUDGE campaign, launched on 17th November 2024, targeted select taxpayers who had been reported by foreign jurisdictions under the AEOI framework as holding foreign assets that were not disclosed in their Income Tax Returns (ITRs) for AY 2024-25. The initiative yielded positive outcomes, with 24,678 taxpayers (including several not directly nudged) revisiting their returns and disclosing foreign assets amounting to Rs 29,208 crore, along with foreign-source
income of Rs 1,089.88 crore.
India receives information on offshore financial holdings of its residents from partner jurisdictions under the Common Reporting Standard (CRS) and from the United States under FATCA, enabling the tax authority to identify mismatches and encourage timely compliance.
CBDT has urged eligible taxpayers to “use this window to make complete statutory disclosures”. Detailed guidance on CRS, FATCA and reporting norms under Schedules FA and FSI is available on the Income Tax Department’s website.