NUDGE: I-T department to launch campaign asking taxpayers to report foreign assets

THe income assess (I-T) section testament set in motion a poke at (Non-intrusive Usage of Data to Guide and Enable) campaign from Friday, asking taxpayers to report their foreign assets acquired in the previous financial year (FY 2024-25) by December 31, if they have not declared the same in their income-tax returns (ITRs), or face action.The campaign is being launched after the Central Board of Direct Taxes (CBDT) identified high-risk cases in its Analysis of the Automatic Exchange of Information (AEOI) for FY 2024-25, where foreign assets appear to exist but have not been reported in the ITRs, a finance ministry statement said. ITRs for FY 2024-25 are to be filed in the current assessment year (AY 2025-26).“Accordingly, the CBDT is launching the second NUDGE campaign, under which SMSs and emails will be issued from 28th November 2025 [Friday] to such taxpayers, advising them to review and revise their returns on or before 31st December 2025 to avoid penal consequences,” it said.The first NUDGE campaign was launched on November 17, 2024, targeting select taxpayers who had been reported by foreign jurisdictions under the AEOI framework as holding foreign assets that were not disclosed in their Income Tax Returns (ITRs) for AY 2024-25.The first campaign yielded positive outcomes, with 24,678 taxpayers (including several not directly nudged) revisiting their returns and disclosing foreign assets (FA) amounting to ₹29,208 crore, along with foreign-source (FSI) income of ₹1,089.88 crore.The campaign aims to facilitate the correct reporting of scheduled FA and FSI in ITRs. Accurate and complete disclosure of foreign assets and income is a statutory requirement under the Income-tax Act and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, the statement saidAdopting a “PRUDENT” approach, CBDT utilises advanced data analytics to simplify compliance processes, reduce information asymmetry, and reinforce a transparent and trust-oriented interface with taxpayers, the statement said.PRUDENT is the acronym for the department’s tax administration approach. The initial P stands for professionalism, R for being responsible and responsive, U for understanding, D for dedication and due diligence, E for effective enforcement with empathy, N for non-intrusive administration, and T for technology-based tax administration.“The initiative aligns with the vision of Viksit Bharat [developed India], fostering accountability, transparency, and a culture of voluntary compliance,” the ministry said. The CBDT continues to strengthen its data-driven, non-intrusive, and taxpayer-centric measures aimed at improving voluntary compliance, it added.The NUDGE initiative reflects CBDT’s commitment to a forward-looking, technology-enabled, and trust-based tax administration focused on promoting accurate reporting and enhancing revenue mobilization, the statement added.The CBDT receives information relating to foreign financial assets of Indian residents from partner jurisdictions pursuant to Common Reporting Standards and from the United States under the Foreign Account Tax Compliance Act. This information assists in identifying potential discrepancies and guiding taxpayers towards timely and accurate compliance, the statement said.