Ahead of the due date for filing Income Tax Return for AY2025-26, the Income Tax Department will nudge approximately 25,000 risk cases in the first phase for disclosure of foreign assets. Non disclosure can lead to penalty of up to ₹10 lakh besides tax and interest penalty.

“Analysis of Automatic Exchange of Information for FY25 (CY2024) has identified high-risk cases where foreign assets appear to exist, but have not been reported in the ITRs filed for AY2025-26,” said a statement issued by the Central Board of Direct Taxes (CBDT). These identified cases will now be part of the Nudge Campaign. Text messages and e-mails will be issued from November 28, advising them to review and revise their returns on or before December 31 to avoid penal consequences. 

second phase

In the second phase starting mid-December, the Nudge Campaign will be expanded to cover other cases as well to improve the compliance ecosystem. Big corporates whose employees have foreign assets and have not disclosed income are also being onboarded, the statement added.

Under the Black Money Act, there is provision of penalty of ₹10 lakh for non-disclosure if the aggregate value of asset/assets (other than immovable property) exceeds ₹20 lakh. Also, the concerned assessee will be required to pay 30 per cent tax and penal interest at 300 per cent of the tax payable. 2025 is the second year of nudging. In the first one for AY2024-25, over 24,600 taxpayers, including several not directly nudged, revised their returns and disclosing foreign assets amounting to over ₹29,000 crore, along with foreign-source income of about ₹1,100 crore.

Till June, the department assessed approximately 1,080 cases, raising demand of approximately ₹40,000 crore. Also, ⁠searches were conducted by in Delhi, Mumbai and Pune, based on data received under the Common Reporting Standard (CRS) and spontaneous exchange of information on investments in Dubai, unearthing undisclosed foreign assets and income worth several hundreds of crores.

Any resident in India in the previous year even if income is below taxable limit, who is having foreign income or foreign asset needs to disclose. Foreign assets include any Foreign Depository account, Custodial account, Cash Value Insurance Contract or Annuity Contract, any account in which the taxpayer has signing authority, trustee/ beneficiary/ settlor in any trust created outside India, Bank Account, Foreign Equity and Debt Interest (including ESOPs), Financial Interest in any Entity/ Business, Immovable Property, any other Capital Asset, etc. located outside India, held in the taxpayer’s name or in respect of which the taxpayer is a beneficial owner.

Foreign income includes income from sources located outside India, such as, salary, house property income, business / professional income, long term capital gains, short term capital gains, interest, dividend, royalty not being part of business income, fees for technical services not being part of business income, gross proceeds, redemption, others.

Published on November 27, 2025