Income Tax Department flags cases of foreign assets not reported in ITR; SMS and email alerts to be issued soon.

The Income Tax Department announced on Thursday that it has flagged several “high-risk” cases where taxpayers failed to disclose their foreign assets while filing Income Tax Returns (ITRs) for Assessment Year (AY) 2025-26.

Starting November 28, the department will begin issuing SMS and email alerts to such taxpayers, advising them to file a revised ITR by December 31, 2025 to avoid penalties.

A similar exercise was carried out last year, when targeted messages were sent to taxpayers identified through data received from foreign jurisdictions under the Automatic Exchange of Information (AEOI) framework. These individuals were found to be holding foreign assets that were not reported in their ITRs for AY 2024-25.

This compliance-nudge initiative saw a strong response — 24,678 taxpayers (including many who did not receive alerts) revisited their filings and disclosed foreign assets worth ₹29,208 crore, along with foreign-source income of ₹1,089.88 crore during AY 2024-25.

According to the department, fresh analysis of AEOI data for FY 2024-25 (CY 2024) has again revealed cases where unreported foreign assets appear to exist, despite ITRs already filed for AY 2025-26.

The Central Board of Direct Taxes (CBDT) receives information on foreign financial assets of Indian residents under the Common Reporting Standard (CRS) and from the U.S. under the Foreign Account Tax Compliance Act (FATCA). This data helps the department identify inconsistencies and guide taxpayers toward accurate and timely compliance.

The ongoing campaign is intended to ensure correct reporting in Schedule Foreign Assets (FA) and Foreign Source Income (FSI) in ITRs. Accurate disclosure of foreign holdings and foreign-source income is a legal obligation under both the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.