You May Need To Revise ITR Before December 31: CBDT Begins 2nd NUDGE For Foreign Asset Compliance

You May Need To Revise ITR Before December 31: CBDT Begins 2nd NUDGE For Foreign Asset Compliance

Taxpayers who may have undisclosed foreign assets could soon receive alerts from the Income Tax Department, with the Central Board of Direct Taxes (CBDT) launching the second NUDGE initiative to strengthen voluntary compliance. The programme begins on November 28, 2025, will allow individuals to correct their income tax returns to avoid penal consequences.

As part of the latest NUDGE drive, the department will send SMS and email advisories asking some taxpayers to voluntarily review and revise their ITRs by December 31, 2025.

“Analysis of the Automatic Exchange of Information (AEOI) for FY 2024-25 (CY 2024) by the Central Board of Direct Taxes (CBDT) has identified high-risk cases where foreign assets appear to exist but have not been reported in the ITRs filed for AY 2025-26. Accordingly, the CBDT is launching the second NUDGE campaign, under which SMSs and emails will be issued from 28th November 2025 to such taxpayers, advising them to review and revise their returns on or before 31st December 2025 to avoid penal consequences," the CBDT said in a statement on Thursday, November 27.

The initiative focuses on ensuring accurate disclosures in Schedule Foreign Assets (FA) and Foreign Source Income (FSI) in accordance with the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

According to CBDT sources, “Initially, select high-risk cases of about 25,000 will be targeted. In second phase starting from mid-December, the NUDGE campaign would be expanded to cover other cases as well to improve compliance ecosystem. Big corporates whose employees have foreign assets and have not disclosed are also bring onboarded to sensitise taxpayers."

⁠Industry bodies, ICAI and associations have also been requested to create awareness.

The ⁠Black Money Act prescribes a penalty of Rs 10 lakh for non-disclosure of foreign assets, apart from a 30% tax and a 300% penalty on the tax payable.

The income tax department assessed about 1,080 cases, raising demand of Rs 40,000 crore (approx.) till June 2025. ⁠Searches were also conducted by Department in Delhi, Mumbai and Pune, based on data received under CRS and spontaneous exchange of information on investments in Dubai unearthing undisclosed foreign assets and income worth several hundreds of crores.

“The department is taking information received from CRS /FATCA framework very seriously. After NUDGE, non-complaint cases may be taken up for further scrutiny and verification," the sources said.

Why CBDT Is Nudging Taxpayers Again

The second NUDGE campaign builds upon the department's technology-enabled oversight framework. CBDT said the approach aligns with its PRUDENT philosophy, emphasising professionalism, data-driven decision-making, non-intrusive administration, and technology-based enforcement to simplify compliance.

The tax authority stressed that transparent disclosure of foreign assets is mandatory, and non-reporting can attract severe penal action. The NUDGE model aims to reduce information gaps, encourage voluntary corrections, and maintain a trust-oriented relationship between taxpayers and the department.

First NUDGE Campaign Delivered Strong Results

The first NUDGE initiative, launched on November 17, 2024, targeted taxpayers flagged by foreign jurisdictions under global reporting frameworks. It generated significant compliance, as 24,678 taxpayers revisited their ITRs, foreign assets worth Rs 29,208 crore were disclosed, and foreign-source income amounting to Rs 1,089.88 crore was reported.

The success appears to have prompted CBDT to expand the programme this year.

How CBDT Identifies Foreign Assets

India receives financial information about residents' overseas accounts and assets through Common Reporting Standard (CRS) from partner jurisdictions, and FATCA data from the United States.

This bulk information is then analysed using the department's advanced data tools to identify mismatches between reported and actual holdings.

What Taxpayers Should Do

CBDT has advised all eligible taxpayers, especially those who receive SMS or email nudges, to review their filings and ensure complete reporting of overseas bank accounts, foreign securities or investments, overseas income, or any other offshore financial interest.

Revised returns must be filed on or before December 31, 2025, to avoid penal consequences.

Source: News18
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