Taxpayers declare over 29,000-cr worth foreign assets; pay Rs 1K-cr tax in special I-T dept campaign

New Delhi: More than 30,000 taxpayers have declared foreign assets worth Rs 29,208 crore following Income-tax department's special 'Trust First' campaign that urged them to report income earned overseas accurately, official sources said Thursday.

The department and its administrative body -- Central Board of Direct Taxes (CBDT) -- began sending SMSes and emails on November 17, 2024 as part of this campaign.

A total of 19,501 taxpayers with "high" foreign account balances or "significant" foreign income from interest or dividends above a specified threshold were contacted.

These communications, according to the sources, requested taxpayers to revise their Income Tax Returns (ITRs) to reflect their foreign assets and income correctly.

Official sources told PTI that 24,678 taxpayers reviewed their ITRs and 5,483 taxpayers filed "belated" returns for the assessment year 2024-25 in which they declared foreign assets worth Rs 29,208 crore and "additional" foreign income of Rs 1,089.88 crore.

A total of 6,734 taxpayers also "revised" their residential status from resident to non-resident, they said.

The I-T department had adopted the "Trust First" approach which prioritises voluntary compliance by taxpayers over enforcement or action or sending verification notices, they said.

This 'foreign assets' campaign was part of this philosophy which the Union government and finance minister Nirmala Sitharaman have also been underlining during their speeches including during Budget presentation, they said.

"Instead of immediate verification or intrusive actions, the tax department has trusted taxpayers first, giving them ample opportunity to make true and complete disclosures of their foreign income and assets," an official said.

About 62 per cent of the taxpayers who were "nudged" as part of this campaign have responded positively, "voluntarily" "revising" their ITRs to declare foreign assets and income, the official said.

According to official data, the number of taxpayers disclosing foreign assets and income on "voluntary" basis has grown from 60,000 in assessment year 2021-22 to 2,31,452 taxpayers in 2024-25.

The I-T department and CBDT's idea is that by fostering transparency, education, and cooperation, the initiative reinforces a compliance-friendly tax environment, ensuring that taxpayers can correct their filings proactively before any formal verification measures are undertaken.

This year, due to "extensive" outreach and awareness efforts, voluntary disclosures witnessed a "significant" 45.17 per cent growth compared to assessment year 2023-24, data said.

The tax department receives data on foreign assets held by Indians abroad through the common reporting standards (CRS) mechanism as part of which 125 countries share such information with the Indian taxman.

A similar exchange occurs with the US under the Inter-Governmental Agreement pursuant to the Foreign Accounts Tax Compliance Act (FATCA).

Last September, India received financial information from over 108 countries regarding foreign accounts and income in the form of interest and dividends earned outside India.