CBDT Reminds Taxpayers to Correct Foreign Asset Reporting or Face Penalties

The Central Board of Direct Taxes (CBDT) is requesting taxpayers with undisclosed foreign income to report their foreign assets under the Non-intrusive Usage of Data to Guide and Enable (NUDGE) campaign.

This is the second NUDGE campaign under which CBDT will be issuing SMSs and emails from November 28, 2025, to such taxpayers, requesting them to review and revise their returns on or before December 31, 2025, to avoid penal consequences.

However, the first NUDGE campaign, carried out on November 17, 2024, encouraged 24,678 taxpayers to revise their tax returns for the 2024-25 year. As a result, they revealed foreign assets worth Rs 29,208 crore and foreign income worth Rs 1,089.88 crore that had not been reported earlier.

The Central Board of Direct Taxes (CBDT) shared that there are many high-risk cases where foreign assets exist but have not been disclosed in the Income Tax Return (ITR). However, the actual number is yet to be published by them.

Foreign Income Disclosures

Indian taxpayers must report any assets they own abroad and any income they earn from outside India in their income tax returns. This reporting is done based on the calendar year (January 1 to December 31), not the financial year.

So, for the financial year 2024-25 (which is assessed in 2025-26), taxpayers must provide details of their foreign assets and foreign income for the calendar year 2024.

If you have assets or earn income from outside India, you need to be careful while filing your Income Tax Return (ITR). The government launched a campaign to help taxpayers report these foreign assets and income accurately.

Taxpayers must file the correct ITR form, complete the sections such as Schedule FA (For reporting Foreign assets) and Schedule FSI (For reporting Foreign income), and also submit Form 67. This will ensure that all your foreign income and assets are correctly reported to the tax authorities.

Reporting foreign assets and income accurately is a statutory requirement as per India’s Income Tax Act and the Black Money (Undisclosed Foreign Income and Assets) Act.

If you’ve paid tax abroad, you can claim relief by filling out Schedule TR. And if you are an Indian investor buying US stocks, you must file your income tax return using ITR-2 or ITR-3.

Tracking System

Taxpayers must be aware that the government tracks all foreign investments, including in the US, via systems like the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA). These systems provide details of foreign bank accounts, balances, and income (interest and dividends).

If you are not reporting foreign assets, it may attract heavy penalties. If you need to update your tax return, it should include foreign income received between January 1 and December 31, 2024 (AY 2025-26).