India Flags 25,000 Taxpayers for Not Declaring Foreign Assets, Heavy Penalties Likely

The Income Tax Department has identified around 25,000 taxpayers who may have failed to disclose their foreign assets in their income tax returns for Assessment Year 2025-26. These individuals were flagged through global financial data shared by foreign governments under the Automatic Exchange of Information (AEOI) system. As part of a “nudge” campaign, officials will soon reach out to them via SMS and email, urging them to correct discrepancies and report all overseas holdings.

In the first phase, the Central Board of Direct Taxes (CBDT) will require these taxpayers to file revised returns by December 31, 2025, to avoid heavy penalties. The second phase, expected to begin mid-December, will widen the scrutiny to include more such cases. Under the Black Money Act, failure to report foreign assets can attract a ₹10 lakh penalty, along with 30% tax and a penalty of up to 300% on the tax amount.

This campaign mirrors last year’s efforts, when 24,678 people were compelled to revise their returns after non-disclosure of assets surfaced. Those corrections revealed previously unreported foreign assets worth ₹29,208 crore, including over ₹1,089 crore in foreign income. Sources also confirmed that the department has already examined more than 1,080 cases this year, with searches conducted in Delhi, Mumbai, and Pune after Dubai-linked investments and undisclosed assets worth hundreds of crores were detected.

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