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With the deadline for filing updated returns approaching, experts advise taxpayers to review their filings carefully, verify their residential status, and ensure full compliance
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Timely correction can help avoid penalties, prolonged correspondence, and potential legal complications
The Income Tax Department has recently sent bulk alerts to thousands of taxpayers across India, urging them to disclose foreign assets or income in their income tax returns. These alerts, issued under the government’s NUDGE 2.0 initiative, have caused widespread concern, particularly among non-resident Indians (NRIs) and individuals who claim they do not own any offshore assets.
According to tax professionals, the alerts are the outcome of a large-scale, centralised data-matching exercise conducted after India received financial information from multiple foreign jurisdictions. This data includes details of bank accounts, investments, interest, dividends, and other income earned or held abroad during the 2024 calendar year. When such information does not align with disclosures made in income tax returns for the assessment year 2025–26, automated alerts are triggered.
The messages sent via email and SMS advise taxpayers to revise their returns by December 31 to ensure complete and accurate reporting. The communication specifically highlights the absence of the “Schedule Foreign Assets” section in the filed return, even though foreign-sourced information appears in international data exchanges.
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Experts note that a significant number of recipients are NRIs whose returns were mistakenly filed with resident status
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In many cases, either taxpayers or their advisors failed to update the residential status correctly, leading the system to expect disclosure of foreign assets
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International tax specialists emphasize that NRIs who receive such alerts should not panic but should promptly revise their returns to reflect the correct status
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Failure to do so could escalate the matter into a formal notice or scrutiny
Interestingly, alerts have also reached individuals who merely travelled overseas for employment or leisure and do not maintain foreign bank accounts or investments. Tax consultants explain that such cases may arise due to incomplete or misinterpreted data received from overseas authorities. If taxpayers genuinely have no foreign assets or income and receive no further communication, there is generally no cause for alarm.
Most of the alerts reportedly relate to assets or accounts in countries such as the United States and the United Arab Emirates. Professionals caution that even dormant or low-value foreign bank accounts must be disclosed if the taxpayer is required to file as a resident.
