MNCs Urge Indian Employees to Report Undisclosed Foreign Assets Before December Deadline

Multinational corporations (MNCs) in India are now urging employees to declare any undisclosed foreign assets or income, following reminders issued by the Income Tax Department under the ongoing compliance campaign, as per news reports.  

The deadline for voluntary disclosure has been marked as December 31, 2025, to avoid financial and legal penalties. 

Income Tax Push Prompts MNCs to Act on Undisclosed Assets 

The Central Board of Direct Taxes (CBDT) has intensified efforts under its "NUDGE Campaign" to identify individuals with foreign income or property who have not declared them in their tax returns.  

Emails sent by tax authorities to companies note that data indicates employees have cross-border holdings requiring mandatory disclosure for the assessment year 2025-26. 

While employee names are not being disclosed in communication to employers, I-T notices have requested firms to encourage voluntary compliance from staff. The Income Tax Act mandates reporting of foreign assets under Schedule FA. 

Consequences of Non-Disclosure Under Black Money Law 

Employees who fail to disclose overseas income or holdings may face severe consequences such as a penalty of ₹10,00,000 and possible prosecution.  

This includes income from employee stock options, foreign investments, and rental income held abroad. Several employees mistakenly believe the foreign investments are not traceable by Indian authorities and thus skip disclosing them in their Income Tax Returns (ITRs). 

Data Sharing Agreements Increasing Transparency 

With international data exchange agreements such as FATCA (shared by the US) and CRS (used by non-US countries), the Indian tax department is receiving financial information of residents within 6 months of the financial year-end.  

This has dramatically improved tracking of offshore transactions and identification of non-reporting individuals. 

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Updated Returns Might Not Offer Full Relief 

Some individuals are updating their ITRs using the ITR-U form under Section 139(8A). However, Section 43 of the Black Money Act does not explicitly provide immunity from penalties for updated returns, creating legal ambiguities.  

Hence, disclosure before the December 31, 2025, deadline is crucial to avoid dual penalties—non-disclosure and income tax non-payment. 

Conclusion 

MNCs in India are now taking active steps to ensure tax compliance among their employees following tax department alerts. With strong penalties under the Black Money Act, timely and accurate disclosure of all foreign assets and income by December 31, 2025, remains essential. 

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