The Income Tax Department is launching its second compliance campaign from Friday, reaching out to approximately 25,000 high-risk taxpayers suspected of hiding foreign assets, as the Central Board of Direct Taxes intensifies its crackdown on unreported overseas wealth.
Starting November 28, the tax authority will send SMS and email alerts to individuals flagged through international data-sharing frameworks, advising them to file revised income tax returns by December 31 or face severe penalties under the Black Money Act. The “NUDGE” (Non-intrusive Usage of Data to Guide and Enable) initiative marks the second phase of the department’s technology-driven enforcement strategy.
Strong Results From First Campaign Drive Expansion
The new campaign follows remarkable success from the inaugural NUDGE initiative launched in November 2024. According to CBDT, that effort prompted 24,678 taxpayers to revisit their returns, disclosing foreign assets worth Rs 29,208 crore and foreign-source income of Rs 1,089.88 crore. The results exceeded expectations, with compliance extending beyond those who received direct alerts.
“The department has assessed approximately 1,080 cases, raising tax demands of around Rs 40,000 crore till June 2025,” according to CBDT sources. Targeted searches in Delhi, Mumbai, and Pune based on data regarding Dubai investments have uncovered undisclosed foreign assets and income worth several hundreds of crores.
Penalties and Compliance Requirements
The department is adopting a phased approach, initially targeting 25,000 select high-risk cases before expanding the campaign mid-December to cover additional taxpayers. CBDT has also enlisted major corporations to sensitize employees who may hold foreign assets, while requesting industry bodies and the Institute of Chartered Accountants of India to create awareness.
Non-disclosure of foreign assets carries steep consequences under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act of 2015. Violators face a penalty of Rs 10 lakh, plus 30% tax on undisclosed income and an additional penalty of 300% on the tax payable.
The high-risk cases were identified through analysis of Automatic Exchange of Information data for fiscal year 2024-25, which CBDT receives from partner jurisdictions under the Common Reporting Standard and from the United States under the Foreign Account Tax Compliance Act. “Analysis of AEOI information for FY 2024-25 has identified high-risk cases where foreign assets appear to exist but have not been reported in the ITRs filed for AY 2025-26,” the department stated.