The Income Tax Department has identified several business families who have not declared foreign assets. Based on AEOI data the department will soon send them a notice. This action is the next phase of the NUDGE campaign to stop tax evasion.
New Delhi: The Income Tax Department has identified several business families that have not disclosed foreign assets or sources of foreign income in their tax returns. Officials said that preparations are underway to send notices to them in the coming months. These families live in cities like Ahmedabad, Surat, Chennai, Hyderabad, Bengaluru and Mumbai. An IT official said, “They have foreign assets worth thousands of crores. IT department officials in all jurisdictions are collecting all the data to get the accurate figure. The nodal office of CBDT in Delhi is also investigating some cases.” He further said, “As soon as we are ready with all the evidence, we will take action and send a notice.”
“The I-T department gets data on foreign assets and foreign bank accounts from other countries. This helps us estimate the actual tax liability of individuals and companies,” the official said.
OECD countries framework
In a press release dated November 27, the IT department said that the analysis of ‘Automated Exchange of Information’ (AEOI) 2024-25 conducted by the Central Board of Direct Taxes (CBDT) has revealed high-risk cases where foreign assets exist but are not reported in the ITR for AY 2025-26 (for FY25).
AEOI is a framework developed by OECD countries to combat tax evasion. Under this, a Common Reporting Standard (CRS) has been created, through which financial institutions in the ‘source’ country collect and report information about account holders (or residents) of other countries to their tax authorities. This information is shared annually with the resident’s ‘home country’.
In 2024, the IT department had launched the NUDGE campaign, which was focused on select taxpayers who were reported to have foreign assets under the AEOI framework but had not disclosed the same in the ITR for AY2024-25. The initiative yielded good results, with 24,678 taxpayers getting their income reviewed and foreign assets worth Rs 29,208 crore and foreign income of Rs 1,090 crore disclosed. Officials said that now the action against business families is the next phase of the NUDGE campaign.
families with foreign economic connections
“Many Indian families have some form of foreign financial connection, whether through inheritance, previous employment or through family arrangements, and not all such holdings are reported,” said a second person.
“Most of these actions are based on CRS data. The notices mention specific foreign accounts or assets without disclosing the exact source of the information,” the person said. He further said, “The department has been issuing CRS-based notices for the last two years and their number is increasing. These notices ask taxpayers to check their disclosures, pay any outstanding tax and file revised returns where applicable.” As per existing law, 30 per cent tax is levied on the value of undisclosed foreign assets or income.
One-Time Six Month Scheme
In the Union Budget 2026, Finance Minister Nirmala Sitharaman announced a ‘One-Time Six Month’ scheme to induce small taxpayers (such as students, young professionals, tech workers, relocated NRIs) to disclose foreign assets or income below a certain limit and pay tax on it. The beneficiaries of this scheme will not have to face any penalty.
The scheme states that if the limit of undisclosed income/assets is up to Rs 1 crore, the individual will have to pay 30 per cent of the fair market value of the assets or 30 per cent of the undisclosed income as tax and 30 per cent additional income tax instead of penalty, thereby exempting them from legal action. According to officials, business families are not eligible to get benefits under this scheme.