Non-Disclosure of Foreign Assets Could Attract IT Action: Know Why 25,000 Taxpayers May Get Alerts

The Income Tax department is initiating a compliance drive by sending SMS and emails to 25,000 individuals identified for non-reporting of foreign assets and income in their Income Tax Returns (ITRs) for Assessment Year (AY) 2025-26. The initiative encourages taxpayers to revise their returns to avoid penalties under the Black Money Act. 

Notices Sent to 25,000 High-Risk Cases Begins November 28 

Starting November 28, 2025, the department will reach out to 25,000 taxpayers identified as “high-risk” cases for failing to disclose foreign assets in AY 2025-26. These cases are based on data from the Automatic Exchange of Information (AEOI) arrangement with foreign jurisdictions. Taxpayers are urged to file revised ITRs by December 31, 2025, to avoid penal actions. 

This step is part of a broader compliance programme known as the ‘NUDGE’ campaign, which aims to enhance voluntary tax compliance. In its second phase, kicking off mid-December 2025, the campaign will expand coverage to additional taxpayers. 

Penalties Under the Black Money Act 

The consequences of non-compliance are significant. Under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, a penalty of ₹10,00,000 may apply for non-disclosure of foreign assets. In addition, tax of 30% on undisclosed income can trigger a penalty of up to 300% on the tax due. 

Read More: Income Tax Refunds 2025: Processing Times for Salaried vs Business Taxpayers! 

Past Campaign Outcome and Further Actions 

In a similar drive last year, 24,678 taxpayers disclosed foreign assets worth ₹29,208 crore and foreign-source income of ₹1,089.88 crore. The campaign significantly contributed to improved income tax compliance. 

So far, 1,080 cases have been assessed, and demands amounting to ₹40,000 crore have been raised. Searches in Mumbai, Delhi, and Pune have uncovered numerous undisclosed assets based on data from CRS and FATCA exchanges, including investments in Dubai. 

Conclusion 

The Income Tax department’s campaign reflects strengthening efforts to curb tax evasion through global information sharing. Taxpayers who have not reported their foreign assets are being given an opportunity to make corrections before penalties are imposed. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.