CBDT Urges Taxpayers To Recheck Returns For Possible Undisclosed Foreign Income

The Central Board of Direct Taxes (CBDT) has asked taxpayers to go back and take another look at their Income Tax Returns (ITRs) to confirm that any foreign income or overseas assets have been properly reported, according to a recent report by the Times of India.

Why CBDT Has Launched A New Review Drive

From 28 November 2025 onwards, the department began sending out a fresh batch of SMS and email reminders to individuals whose filings appear inconsistent with information gathered through various data sources. This is part of the second phase of its “NUDGE” campaign, a programme meant to encourage people to correct lapses on their own instead of waiting for a formal notice.

Officials familiar with the matter say the renewed attention follows inputs received from international data-sharing arrangements. Information coming in from partner jurisdictions suggested that a number of residents may be holding bank accounts, investments, or income streams abroad that do not show up in the returns they filed at home.

The campaign is not entirely new. When the first phase was rolled out in 2024, nearly 25,000 individuals chose to revise their returns. That exercise led to the disclosure of substantial foreign assets and income that had earlier been left out. The outcome convinced the department to broaden the programme this year and reach out to a larger group of taxpayers.

What Taxpayers Should Revisit In Their ITRs

Under Indian tax law, residents are required to disclose every category of foreign asset — whether it is money in an overseas bank, shares held in foreign companies, property situated abroad, or any financial interest outside the country. Any income earned overseas must also be reported. These obligations flow from the Income-tax Act, 196,1, and the Black Money (Undisclosed Foreign Income and Assets) Act.

Those who have any form of overseas exposure need to ensure that the correct ITR form has been used. Returns involving foreign assets typically require ITR-2 or ITR-3, along with the detailed schedules that capture such information. Schedule FA must list all foreign assets, while Schedule FSI deals with foreign-sourced income. Claiming foreign tax relief also calls for accurate and complete disclosures.

India now receives financial information from a wide range of countries under mechanisms like CRS and FATCA. As a result, the tax department gets a fairly granular picture of offshore accounts and holdings. If the data received from abroad does not match what appears in a taxpayer’s return, the gap becomes easy to spot — and the penalties under the Black Money Act are steep.

A Window To Correct Filings Without Penalty

For now, the department is presenting this second NUDGE phase as a chance for taxpayers to clean up errors before the window closes on 31 December 2025. Filing a revised return during this period can help avoid the risk of notices, further queries, or more serious consequences later on.

Tax professionals say it would be wise for anyone with even a small foreign investment, a dormant account, or income from abroad in previous years to sit down and recheck their filings. With more data flowing in each year, the department’s message is clear: fix the gaps now rather than face complications down the line.