The Central Board of Direct Taxes (CBDT) is starting the second phase of its nationwide NUDGE campaign to identify taxpayers who have not reported foreign assets or income in their Income Tax Returns (ITRs) for the assessment year 2024-25.
Taxpayers identified by the department will receive SMS and email alerts, asking them to review and correct their returns before December 31, 2025, to avoid penalties.
How Taxpayers Are Identified
The CBDT uses data from multiple sources to spot high-risk cases. This includes:
TDS statements
Property purchases
High-value transactions
Stock market activity
Foreign remittances
Information shared by other countries
Officials analyze this information and compare it with what taxpayers reported in their ITRs.
Last year’s campaign identified 24,678 taxpayers, uncovering foreign assets worth ₹29,208 crore and income of ₹1,089.88 crore.
Guidelines to Disclose Foreign Assets
CBDT has issued seven guidelines to help taxpayers report foreign income and assets correctly.
Disclosure is mandatory under the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Key points include:
Schedule FSI: Report income from outside India and claim tax relief.
Schedule FA: Share details of foreign assets and income.
Schedule TR: Summarize tax relief claimed for taxes paid abroad.
Use the correct ITR form that supports foreign asset reporting (not ITR-1 or ITR-4).
Include country codes, taxpayer IDs, Form 67, and DTAA details where applicable.
Taxpayers can also seek assistance from chartered accountants or tax experts to ensure accurate reporting.
Deadline and Penalties
The CBDT emphasizes that taxpayers must file revised returns by December 31, 2025.
Non-disclosure can attract heavy penalties and interest, so it is important to act promptly once a NUDGE alert is received.
This second campaign aims to make compliance easier and encourage taxpayers to voluntarily disclose any foreign income or assets.
