The number of taxpayers disclosing foreign assets and income voluntarily has witnessed a steep rise in the last few years, according to government data. Nearly 30,161 Indians were reported to have foreign assets worth more than 29,000 crores in September 2024, government sources have told NDTV.
Sources said that India received financial information from over 108 countries regarding foreign accounts and income in the form of interest and dividends earned outside India by its citizens.
The number of taxpayers disclosing foreign assets and income voluntarily has grown from 60,000 in 2021-22 to 2,31,452 taxpayers in 2024-25.
This year, due to extensive outreach and awareness efforts, voluntary disclosures witnessed a significant 45.17% growth compared to 2023-24.
India is one of the early adopters of Common Reporting Standards (CRS) and has been receiving data since 2018.
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 USA under the Inter-Governmental Agreement under the Foreign Accounts Tax Compliance Act (FATCA), 2010.
Using this data received under the automatic exchange of information, the Central Board of Direct Taxes (CBDT) launched a Compliance-Cum-Awareness Campaign on 17th November 2024, urging taxpayers to declare their foreign assets and income in revised Income Tax Returns (ITRs) for Assessment Year (AY) 2024-25.
This campaign followed a system-driven and taxpayer-friendly approach, utilising the information received through CRS and FATCA.
The Income Tax Department (ITD) facilitated taxpayers by providing a step-by-step guide to filling Schedule Foreign Assets and Schedule Foreign Source Income, along with explanatory materials to help them understand the information received under these frameworks.
As part of the campaign, SMS and emails were sent to 19,501 taxpayers with high foreign account balances or significant foreign income from interest or dividends above a specified threshold.
The taxpayers were requested to revise their Income Tax Returns (ITRs) to reflect their foreign assets and income.
Additionally, 30 outreach sessions, seminars, and webinars were conducted across India, engaging over 8,500 participants directly.
Pamphlets, brochures, and elaborate Samvaad sessions on social media further amplified awareness.
The campaign yielded significant results, with 24,678 taxpayers reviewing their ITRs and 5,483 taxpayers filing belated returns for AY 2024-25, declaring foreign assets worth Rs 29,208 crore and additional foreign income of Rs 1,089.88 crore. Furthermore, 6,734 taxpayers revised their residential status from Resident to Non-Resident.
Overall, approximately 62% of taxpayers responded positively, voluntarily revising their ITRs to declare foreign assets and income.
At the heart of this campaign lies the ‘Trust First’ approach, which prioritises voluntary compliance over enforcement.
Instead of intrusive actions, the Department has trusted taxpayers first, giving them ample opportunity to make true and complete disclosures of their foreign income and assets.
By fostering transparency, education, and cooperation, the initiative has reinforced a compliance-friendly tax environment, ensuring that taxpayers can correct their filings proactively before any formal verification measures are undertaken.
This shift towards a collaborative and trust-driven approach marks a significant step in strengthening India’s tax compliance framework while maintaining fairness and encouraging responsible financial disclosures.