Income Tax Department Eyes 25,000 Individuals for Undisclosed Overseas Assets in ITR

New Delhi: Taxpayers who own foreign assets but fail to report them in their Income Tax Returns (ITR) are now under strict scrutiny. The Income Tax Department has identified over 25,000 high-risk individuals for the assessment year 2025-26 who did not disclose their overseas holdings.

The Central Board of Direct Taxes (CBDT) will alert these taxpayers through SMS and email, giving them an opportunity to file revised returns including details of their foreign assets by 31 December 2025. Failure to comply will invite penalties and legal action under existing tax laws.

A government source stated, “In the first phase, around 25,000 high-risk cases will be targeted. Notifications will advise taxpayers to update their returns with foreign asset information before or by 31 December. From around 15 December, additional cases will be covered.” The source added that several employees of major companies are among the taxpayers who have overseas assets but have not disclosed them.

How the cases were identified
The CBDT detected these high-risk cases during the Automatic Exchange of Information (AEOI) review for FY 2024-25. Information on Indian citizens’ foreign assets is obtained from partner countries under the Common Reporting Standard (CRS). Additionally, data from the Foreign Account Tax Compliance Act (FATCA) of the USA also helps identify such undisclosed holdings. Consequently, even if a taxpayer tries to hide overseas assets, the authorities are able to track them.

Sources revealed that, based on CRS data and information on investments in Dubai, search operations in Delhi, Mumbai, and Pune uncovered foreign assets worth hundreds of crores of rupees. By June this year, the Income Tax Department had completed assessments in 1,080 cases, generating around ₹40,000 crore in tax demand.

This initiative is part of the government’s ongoing effort to improve transparency, ensure compliance, and curb tax evasion related to foreign assets.