New Delhi: The Central Board of Direct Taxes (CBDT) is intensifying scrutiny of undisclosed offshore holdings with the launch of the second phase of its automated exchange of information (AEOI)-based ‘NUDGE’ campaign beginning November 28, 2025. The drive follows fresh analytics indicating that several taxpayers who appear to own foreign financial assets have not reported them in their income tax returns (ITRs) for assessment year 2025-26.
As part of the initiative, selected taxpayers will receive SMS and email alerts advising them to revisit and revise their filings, particularly details under Schedule Foreign Assets (FA) and Foreign Source Income (FSI), on or before December 31, 2025, to avoid possible penal consequences under the Income-tax Act, 1961, as well as the stringent Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Officials say the campaign reflects the tax administration’s preference for technology-driven nudging over intrusive enforcement. The board is positioning the initiative as an example of its PRUDENT [professionalism, responsible & responsive, understanding (laws, transactions & business), dedication & due diligence/data-based decision making, effective enforcement (with empathy), non-intrusive administration (taxpayer-centric, compliance-nudging), technology (technology-based tax administration)] governance model.
According to the CBDT, advanced analytics of CRS and FATCA datasets are now enabling it to match foreign account information with domestic filings in near-real time, reducing information asymmetry and fostering a more transparent and trust-based compliance environment. The move ties in with the government’s vision that emphasizes transparency, accountability and an ecosystem of voluntary tax compliance rather than fear-based enforcement.
The first NUDGE campaign, rolled out on November 17 last year, had targeted taxpayers whose offshore holdings were flagged by foreign jurisdictions but absent from their ITRs for AY 2024-25. The results were significant: 24,678 taxpayers, including several who were not directly nudged, updated their filings to disclose offshore assets valued at ₹29,208 crore and foreign-source income totalling ₹1,089.88 crore. Encouraged by that response, the CBDT is leaning further on behavioural prompts powered by digital intelligence to expand voluntary reporting.
India receives extensive information on financial accounts held abroad by residents under global data-sharing arrangements — primarily through the OECD’s Common Reporting Standards (CRS) and the United States’ Foreign Account Tax Compliance Act (FATCA). These datasets provide the foundation for identifying mismatches between offshore holdings reported internationally and those disclosed domestically.
The department has urged taxpayers with overseas assets or income streams to use the current opportunity to ensure full and accurate reporting. Those who fail to do so risk exposure to anti-black money provisions, including significant penalties and prosecution.
Further guidance on CRS, FATCA and the reporting requirements of Schedule FA and Schedule FSI is available on the income tax e-filing portal.