The Central Board of Direct Taxes (CBDT) is launching the second NUDGE campaign, under which SMSs and emails will be issued from Friday to identified NUDGE asking them to voluntarily review and revise their returns on or before 31 December 2025 to avoid penal consequences.
According to the Ministry of Finance, analysis by the CBDT of the Automatic Exchange of Information (AEOI) for FY 2024-25 (CY 2024) has identified high-risk cases in which foreign assets appear to exist but have not been reported in ITRs filed for AY 2025-26.
The campaign aims to facilitate correct reporting in Schedule Foreign Assets (FA) and Foreign Source Income (FSI) in ITRs. Accurate and complete disclosure of foreign assets and income is a statutory requirement under the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
The CBDT continues to strengthen its data-driven, non-intrusive, and taxpayer-centric measures to improve voluntary compliance. The “Non-intrusive Usage of Data to Guide and Enable (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 mobilisation.
The first NUDGE campaign, launched on 17 November 2024, targeted 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 initiative yielded positive outcomes, with 24,678 taxpayers (including several not directly nudged) revisiting their returns and disclosing foreign assets amounting to Rs 29,208 crore, along with foreign-source income of Rs 1,089.88 crore.
The CBDT receives information relating to foreign financial assets of Indian residents from partner jurisdictions pursuant to Common Reporting Standards (CRS) and from the United States under the Foreign Account Tax Compliance Act (FATCA). This information assists in identifying potential discrepancies and guiding taxpayers towards timely and accurate compliance.