he Income Tax Department is gearing up to send SMS and email alerts to nearly 25,000 individuals who may have not reported their foreign assets in their Income Tax Returns for the Assessment Year 2025–26. These taxpayers have been flagged as high-risk cases based on information received from other countries through international data-sharing agreements. The move aims to encourage timely voluntary compliance and prevent potential legal action.

Why Are These Taxpayers Being Alerted?

The Finance Ministry has revealed that advanced data analytics applied to AEOI (Automatic Exchange of Information) records have identified several high-risk cases. In the first phase, about 25,000 taxpayers will receive alerts regarding possible unreported or incorrectly reported foreign assets.

The Central Board of Direct Taxes (CBDT) has also confirmed that this compliance drive will expand from mid-December 2025. This brings more taxpayers under review to strengthen transparency and voluntary reporting.

What Happens in the Next Phase?

The second phase of the campaign will roll out in mid-December. This will expand the outreach to include more individuals. The Income Tax Department has also contacted large companies whose employees may have foreign assets that were not disclosed in their returns. In addition, industry bodies, ICAI, and professional associations have been urged to create awareness and help taxpayers understand their reporting responsibilities.

According to an official statement, the information received helps the department identify discrepancies and encourages taxpayers to correctly report their overseas assets and foreign income in Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income) of their returns.

What Are the Penalties for Not Reporting Foreign Assets?

The law takes non-disclosure very seriously. Under the Black Money Act, failing to report foreign assets can result in a penalty of Rs 10 lakh, a 30 per cent tax, and an additional penalty of up to 300 per cent of the tax due.

These strict provisions are designed to curb undeclared overseas income and assets held by Indian residents and promote full tax transparency.

What Should Taxpayers Do Now?

The CBDT has encouraged all eligible taxpayers to use this opportunity to make complete and accurate disclosures before stricter enforcement actions begin. More details about CRS, FATCA, and the rules for reporting under Schedule FA and Schedule FSI are available on the official Income Tax Department website for reference.