CBDT Urges Taxpayers to Revise ITRs for Undisclosed Foreign Income Before December Deadline

The Central Board of Direct Taxes (CBDT) has launched the second phase of its NUDGE compliance campaign, issuing SMS and email alerts to taxpayers who may have failed to disclose foreign income or overseas assets in their Income Tax Returns (ITRs). The initiative, which began on November 28, 2025, urges taxpayers to review and revise their filings before December 31, 2025, to avoid penalties.

The move follows the success of the first NUDGE campaign launched in November 2024. During that phase, 24,678 taxpayers revised their returns for AY 2024–25, leading to the disclosure of ₹29,208 crore in foreign assets and ₹1,089.88 crore in foreign-source income. For the ongoing assessment year, authorities have identified several high-risk cases where foreign holdings may exist but remain unreported; however, the exact number has not yet been released.

Under the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) Act, 2015, Indian residents must disclose all foreign assets and overseas income in their ITRs. Reporting is aligned to the calendar year, meaning taxpayers must declare all foreign income and assets held between January 1 and December 31, 2024, in their current filings.

Taxpayers with overseas income or investments must select the appropriate ITR form—typically ITR-2 or ITR-3—and complete Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income). Those seeking credit for taxes paid abroad are required to submit Form 67. For instance, Indians investing in US stocks cannot use ITR-1 or ITR-4.

The government has strengthened its monitoring mechanisms through global information-exchange frameworks like the Common Reporting Standard (CRS) and FATCA, allowing it to access detailed data on foreign financial accounts held by Indian residents. Failure to report foreign assets can attract significant penalties running into several lakhs.

Taxpayers have until December 31, 2025, to revise their returns and ensure complete reporting of foreign income earned during the 2024 calendar year as part of the compliance drive.