I-T dept to send SMS/emails to 25K individuals for non-disclosure of foreign assets

New Delhi: The Income Tax Department is preparing to send SMS and email alerts to nearly 25,000 individuals flagged as “high-risk” for failing to disclose foreign assets in Income Tax Returns filed for Assessment Year 2025-26. Sources indicated that these cases were identified through information received from partner nations under the Automatic Exchange of Information framework.

Officials said the outreach forms the first phase of a larger compliance push led by the Central Board of Direct Taxes. The alerts will ask taxpayers to submit revised returns by December 31, 2025, if any foreign assets were omitted while filing. The communication is intended to help taxpayers correct disclosures before legal action and penalties are considered.

The second phase of the initiative is expected to begin in mid-December, extending coverage beyond the initial 25,000 individuals. Sources said the focus is on strengthening voluntary compliance and widening awareness among those who may have undisclosed assets abroad. Corporate employers where staff hold foreign investments are also being engaged. According to officials, industry associations and chartered accountants’ bodies have been requested to help spread the message.

A separate departmental statement said, “Analysis of AEOI information for FY 2024-25 (CY 2024) has identified high-risk cases where foreign assets appear to exist but have not been reported in the ITRs filed for AY 2025-26.” The department stated that information continues to flow from jurisdictions covered by Common Reporting Standards and from the United States under the Foreign Account Tax Compliance Act, allowing authorities to detect mismatches between reported and actual holdings.

Under the Black Money Act, non-disclosure of overseas assets can attract a penalty of Rs 10 lakh. Further consequences include a tax levy of 30 per cent and an additional penalty of 300 per cent on the tax payable.

The department undertook a similar exercise last year, issuing alerts to selected taxpayers whose offshore assets had been reported through the same automated exchange network. That exercise prompted 24,678 individuals to review their filings. Disclosures in AY 2024-25 amounted to Rs 29,208 crore in foreign assets, with foreign-source income of Rs 1,089.88 crore reported.

According to sources, the department evaluated about 1,080 cases up to June 2025 and raised a cumulative tax demand of Rs 40,000 crore. Officials added that searches were conducted in Delhi, Mumbai and Pune following data inputs on Dubai-linked investments shared under spontaneous and CRS channels. These actions uncovered foreign assets and income running into several hundred crores.

Authorities said the campaign’s objective is to ensure accurate filing in the Schedule Foreign Assets and Foreign Source Income sections of tax returns. They noted that proper reporting is mandatory under the Income-tax Act, 1961, and the Black Money and Imposition of Tax Act, 2015, warning that those who fail to rectify discrepancies may face further action.