Income Tax Compliance Drive Uncovers Rs 30,300 Crore in Foreign Assets and Income

A special compliance campaign by the Income Tax Department has led to voluntary disclosures of foreign assets and income worth Rs 30,300 crore for the assessment year 2024-25, Union Finance Minister Nirmala Sitharaman informed the Lok Sabha. Over 30,000 taxpayers revised their income tax returns or filed belated returns as part of this initiative.

The Finance Minister stated that the department sent SMS and e-mails to around 19,501 taxpayers, urging them to review their income tax filings based on information regarding foreign deposits. This "nudge campaign" prompted 11,162 taxpayers to revise their tax returns and submit the Schedule Foreign Assets Form, declaring total foreign assets worth Rs 11,259.29 crore and foreign income of Rs 154.42 crore. Additionally, 883 taxpayers corrected their residency status from resident to non-resident in their revised filings for AY 2024-25.

Another 13,516 taxpayers disclosed foreign assets amounting to Rs 7,564 crore and foreign income of approximately Rs 353 crore in their revised ITRs. This compliance-cum-awareness campaign contributed to a 45.17% year-on-year surge in voluntary disclosures compared to the previous fiscal year.

The Income Tax Department launched this initiative with a data-driven and non-intrusive approach to encourage taxpayers to declare offshore wealth and income voluntarily. Financial information from over 108 countries, including details of foreign accounts, interest, and dividends earned by Indian citizens, played a crucial role in this drive.

The number of taxpayers disclosing foreign assets and income has increased significantly, rising from 60,000 in 2021-22 to 2,31,452 in 2024-25. India, an early adopter of the Common Reporting Standards (CRS), has been receiving such financial data since 2018 as part of a global information-sharing framework involving more than 125 countries. A similar exchange of financial data occurs with the United States under the Foreign Accounts Tax Compliance Act (FATCA), 2010.

The Central Board of Direct Taxes (CBDT) initiated this Compliance-Cum-Awareness Campaign on November 17, 2024, using information obtained through CRS and FATCA. To facilitate taxpayers, the department provided step-by-step guidance and explanatory materials to assist them in accurately filing Schedule Foreign Assets and Schedule Foreign Source Income.

The success of this campaign highlights the government's continued efforts to promote tax compliance and transparency while leveraging international data-sharing mechanisms to track undisclosed foreign assets and income.

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