Income Tax department identifies cases of non-disclosure of foreign assets in ITRs
The Income Tax Department has detected several cases involving the non-reporting of foreign assets in Income Tax Returns (ITRs). To address this, the department will begin sending SMS and email alerts to concerned taxpayers starting November 28, requesting them to file a revised ITR by December 31, 2025, to avoid penalties.
In a statement issued on Thursday (November 27, 2025), the department said it has identified “high-risk” cases where individuals failed to disclose foreign assets in the ITRs filed for the Assessment Year (AY) 2025–26.
Similar communication was undertaken last year as well, when SMS and email notices were sent to select taxpayers whose foreign asset details were shared by overseas jurisdictions under the Automatic Exchange of Information (AEOI) framework. As a result of this initiative, 24,678 taxpayers—including some who did not receive direct communication—revised their ITRs for AY 2024–25. They disclosed foreign assets worth ₹29,208 crore and foreign income amounting to ₹1,089.88 crore.
The department stated that the analysis of AEOI data for the financial year 2024–25 (calendar year 2024) has revealed cases where foreign assets seem to exist but were not reported in the ITRs filed for AY 2025–26.
The Central Board of Direct Taxes (CBDT) receives information on foreign financial assets of Indian residents from partner countries under the Common Reporting Standards (CRS) and from the United States under the Foreign Account Tax Compliance Act (FATCA). This data helps identify possible mismatches and encourages taxpayers to comply accurately and on time.
The objective of the campaign is to ensure correct disclosure of foreign assets under Schedule FA and foreign source income under Schedule FSI in the ITRs.
Proper reporting of foreign assets and income is a legal obligation under the Income-tax Act, 1961, as well as the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. We provide the best ITR filing services.
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Frequently Asked Questions (FAQs)
1. What are considered foreign assets under the Income Tax Act?
Foreign assets include overseas bank accounts, foreign shares or securities, immovable property outside India, foreign mutual funds, trusts, and any other financial interest held abroad.
2. Who is required to disclose foreign assets in the ITR?
Resident and ordinarily resident individuals in India must disclose their foreign assets and income in Schedule FA of the Income Tax Return.
3. Is disclosure required even if the foreign asset did not generate any income?
Yes, foreign assets must be disclosed irrespective of whether they have generated any income during the financial year.
4. What happens if foreign assets are not disclosed in the ITR?
Non-disclosure can attract penalties under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015, along with prosecution in serious cases.
5. Can I avoid penalties by filing a revised ITR?
Yes, taxpayers who have missed reporting foreign assets can file a revised or updated ITR within the prescribed timeline to avoid severe penal consequences.
6. What is Schedule FA in the Income Tax Return?
Schedule FA is a dedicated section in the ITR for reporting details of foreign assets and foreign income held during the relevant financial year.
7. Do NRIs need to disclose foreign assets in Indian ITRs?
Generally, NRIs are not required to disclose foreign assets in Schedule FA. The requirement mainly applies to residents and ordinarily residents.
8. How does the Income Tax Department identify undisclosed foreign assets?
The department receives information through international exchange of information agreements, foreign financial institutions, and data analytics.
9. Is foreign income taxable in India?
Foreign income is taxable in India for resident and ordinarily resident individuals, subject to relief under applicable Double Taxation Avoidance Agreements (DTAA).
10. What documents should be kept for foreign asset disclosure?
Taxpayers should maintain bank statements, investment proofs, acquisition details, and valuation records related to their foreign assets.
