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New Delhi: A “compliance - cum - awareness” campaign launched by the Central Board of Direct Taxes (CBDT) has prompted over 30,000 taxpayers to declare foreign assets worth over Rs 29,000 crore and additional overseas income of Rs 1,089.88 crore, government sources said.
As part of the campaign, the tax authorities sent notices through emails and SMS to 19,501 taxpayers with high foreign account balances or significant foreign income from interest or dividends above a specified threshold.
Through these communications, the tax authorities asked taxpayers to revise their Income Tax Returns (ITRs) to reflect their foreign assets and income accurately. As a result, 6,734 taxpayers have revised their residential status from “Resident” to “Non-Resident”.
A source underlined that the disclosure on additional income and assets by the taxpayers have been done without any intrusive actions. Nearly 62% of nudged taxpayers responded positively, voluntarily revising their ITRs to declare foreign assets and income.
The number of taxpayers disclosing foreign assets and income on a voluntary basis has steadily grown from 60,000 in Assessment Year (AY) 2021-22 to 2,31,452 taxpayers in AY2024-25. “This year, due to extensive outreach and awareness efforts, voluntary disclosures witnessed a significant 45.17% growth compared to AY 2023-24,” the source informed.
Last September, India received financial information from over 108 countries regarding foreign accounts and income in the form of interest and dividends earned outside India.
Using this data, the CBDT launched a special campaign on November 17 urging taxpayers to declare their foreign assets and income in revised ITRs for AY 2024-25.
The tax authorities used the data and information received through the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) to nudge the taxpayers on foreign income and asset disclosures. The CRS and FATCA are international frameworks designed to combat tax evasion.
India is one of the early adopters of the Common Reporting Standards and has been receiving data since 2018 for the calendar year 2016 and onwards. More than 125 countries have agreed to share financial information of individuals linked to other jurisdictions on an automatic basis, including details of accounts held, account balances, dividends, interest received, and gross payments.
A similar exchange occurs with the US under the Inter-Governmental Agreement pursuant to the Foreign Accounts Tax Compliance Act (FATCA), 2010.