The Central Board of Direct Taxes (CBDT) has launched the second phase of its NUDGE initiative to strengthen voluntary compliance relating to the disclosure of foreign assets and income. Beginning November 28, the department will send SMS and email alerts to identified taxpayers, advising them to review and revise their Income Tax Returns (ITRs) for AY 2025–26 by December 31, 2025, to avoid penal consequences.
According to the finance ministry, the initiative follows an analysis of Automatic Exchange of Information (AEOI) data for FY 2024–25, which flagged several high-risk cases where taxpayers appeared to hold foreign assets that were not reported in their filings. The campaign focuses on improving the accuracy of disclosures in Schedule Foreign Assets (FA) and Schedule Foreign Source Income (FSI), both mandatory under the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
CBDT said the initiative forms part of its PRUDENT approach to tax administration, which emphasises professionalism, responsible and responsive governance, data-driven decision-making, effective enforcement with empathy, non-intrusive compliance nudging and the use of advanced technology. According to the Board, these measures aim to simplify compliance, reduce information asymmetry and promote a transparency-oriented relationship with taxpayers, aligning with the vision of Viksit Bharat.
The first NUDGE campaign, launched on November 17, 2024, targeted taxpayers reported by foreign jurisdictions under the AEOI framework for non-disclosure of offshore assets in their ITRs for AY 2024–25. The campaign led to 24,678 taxpayers revisiting their returns, resulting in disclosures of foreign assets worth ₹29,208 crore and foreign-source income of ₹1,089.88 crore.
India receives information on foreign financial assets of its residents from partner jurisdictions under the Common Reporting Standard (CRS) and from the United States under the Foreign Account Tax Compliance Act (FATCA). This data enables the CBDT to identify discrepancies and guide taxpayers toward timely compliance.
The CBDT has urged all eligible taxpayers to use the opportunity to ensure complete and accurate reporting. Additional information on CRS, FATCA, Schedule FA and Schedule FSI is available on the Income Tax Department website.
