CBDT flags 25,000 high-risk foreign asset cases; second ‘nudge’ campaign begins

The department has assessed approximately 1,080 cases, raising tax demands of around Rs 40,000 crore till June 2025.

The Central Board of Direct Taxes (CBDT) has launched the second phase of its ‘nudge’ initiative after identifying roughly 25,000 high-risk taxpayers whose foreign assets appear unreported in Income Tax Returns (ITRs) for Assessment Year 2025-26.

The department has assessed approximately 1,080 cases, raising tax demands of around Rs 40,000 crore till June 2025. Targeted searches in Delhi, Mumbai and Pune based on CRS and spontaneous exchange information uncovered undisclosed foreign assets and income worth several hundreds of crores, particularly linked to Dubai investments, sources in the CBDT said.

From 28 November 2025, CBDT will issue SMSs and emails advising these taxpayers to “review and revise their returns on or before 31 December 2025 to avoid penal consequences,” CBDT said in a statement.

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.

Sensitising Corporates

“Initially, select high-risk cases of 25,000 approximately will be targeted. In the second phase starting from mid December the NUDGE campaign would be expanded to cover other cases as well to improve the compliance ecosystem,” sources in CBDT said.

CBDT is also involving corporates to sensitise employees who may be holding foreign assets without reporting them.

“Big corporates whose employees have foreign assets and have not disclosed are also being onboarded to sensitise taxpayers. Industry bodies, Institute of Chartered Accountants of India (ICAI) and associations have also been requested to create awareness,” sources in CBDT said.

Penalties

Non-disclosure attracts penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, including a Rs 10 lakh fine, 30 percent tax on undisclosed income, and a penalty of 300 percent on tax payable.

These cases were flagged using data under the Automatic Exchange of Information (AEOI) framework, which includes the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) from partner jurisdictions.

“Department is taking information received from Common Reporting Standard (CRS) / Foreign Account Tax Compliance Act (FATCA) framework very seriously. After NUDGE non-compliant cases may be taken up for further scrutiny and verification,” sources in CBDT said.

First Nudge initiative

The first NUDGE campaign, launched in November 2024, prompted 24,678 taxpayers to revisit their returns, disclosing foreign assets of Rs 29,208 crore and foreign-source income of Rs 1,089.88 crore, CBDT said in a statement.

The initiative forms part of CBDT’s ‘Prudent’ approach — Professionalism, Responsibility, Understanding, Dedication, Effective enforcement, Non-intrusive administration, and Technology-driven operations — promoting transparent, voluntary compliance without intrusive enforcement.

What taxpayers need to know

Under Schedule FA (Schedule of Foreign Assets), Indian residents must disclose foreign financial assets, including bank accounts, shares, debentures, mutual funds, and immovable property abroad. Under Schedule FSI (Schedule of Foreign Source Income), taxpayers must report income earned from foreign sources, including interest, dividends, capital gains, and rental income

Revised returns for AY 2025-26 can be filed up to 31 December 2025 without facing penalties, allowing taxpayers to remain compliant while benefiting from CBDT’s non-intrusive guidance.