Income Tax Department Issues Notices to Business Families for Undisclosed Overseas Assets

The Income Tax Department has identified a group of business families that have not reported overseas assets or income in their tax returns and is preparing to issue formal notices in the coming months, as per The Moneycontrol report. 

Income Tax Department Notice Initiative 

Families based in Ahmedabad, Surat, Chennai, Hyderabad, Bengaluru and Mumbai are the focus of the exercise, which follows the earlier NUDGE campaign.  

The department says the undisclosed assets are valued at approximately ₹3,000 crore, and that evidence is being compiled before notices are dispatched. 

Data Sources and Asset Valuation 

Information is drawn from the Automatic Exchange of Information framework, where foreign financial institutions report account details to their home tax authorities.  

The Central Board of Direct Taxes uses this data to identify high‑risk cases for Assessment Year 2025‑26. In the previous NUDGE drive, 24,678 taxpayers disclosed assets totalling ₹29,208 crore and foreign income of ₹1,090 crore. 

Read More: India’s Net Direct Tax Collections Rise 9.4% to ₹19.43 Trillion till February 10! 

Tax and Penalty Framework 

Undisclosed overseas assets attract a tax rate of 30% on the asset’s fair market value for the previous year. In addition, a penalty equal to three times the tax amount may be imposed. The Black Money Act also provides for prosecution where applicable. 

Small Taxpayer Disclosure Scheme 

The Union Budget 2026 introduced a six‑month scheme for small taxpayers with undisclosed assets up to ₹1,000 crore.  

Eligible individuals pay 30% tax and an additional 30% as a penalty‑equivalent, gaining immunity from prosecution. Business families do not qualify for this relief. 

Implications for Affected Families 

Notices will reference specific overseas accounts without revealing the source of the information.  

Recipients are expected to review their disclosures, settle any tax due, and, where required, file revised returns. Failure to comply may result in the statutory tax, penalty, and possible legal action. 

Conclusion 

The Income Tax Department’s upcoming notices aim to enforce compliance among business families with significant overseas holdings, applying existing tax and penalty rules while distinguishing them from the relief available to smaller taxpayers. 

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