CBDT launches second NUDGE initiative to boost voluntary compliance on foreign assets

New Delhi [India] November 27 : The Central Board of Direct Taxes (CBDT) on Thursday announced the launch of the second phase of its NUDGE initiative aimed at strengthening voluntary compliance in reporting foreign assets and income.

As part of the campaign, according to a government release, the CBDT will begin issuing SMS and email alerts from November 28, 2025, to taxpayers identified through the Automatic Exchange of Information (AEOI) analysis for FY 2024-25. These alerts will advise taxpayers to review and revise their Income Tax Returns (ITRs) for assessment year (AY) 2025-26 by December 31, 2025, to avoid penal consequences.

According to the Finance Ministry, advanced data analytics of AEOI information have flagged several high-risk cases where foreign assets appear to exist but remain unreported in the returns filed.

The campaign seeks to promote accurate reporting in Schedule Foreign Assets (FA) and Schedule Foreign Source Income (FSI), which is mandatory under the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The CBDT said the initiative is guided by its PRUDENT approach, emphasising professionalism, responsibility, understanding of laws and transactions, due diligence, effective yet empathetic enforcement, non-intrusive administration and technology-driven processes. The Board noted that the strategy is aligned with the government's Viksit Bharat vision, focusing on transparency, accountability and voluntary compliance.

CBDT added that the NUDGE framework reflects its commitment to a technology-enabled, data-driven and taxpayer-centric tax administration.

The first NUDGE campaign, launched on November 17, 2024, resulted in 24,678 taxpayers revisiting their returns. These taxpayers disclosed foreign assets worth Rs 29,208 crore and foreign-source income of Rs 1,089.88 crore after being nudged based on AEOI inputs.

India receives information on overseas financial holdings of its residents under the Common Reporting Standard (CRS) from partner jurisdictions and under FATCA from the United States. This data helps the tax department detect mismatches and guide taxpayers toward timely compliance.

The CBDT has urged all eligible taxpayers to use this opportunity to fully comply with statutory reporting requirements. Further details on CRS, FATCA and disclosure requirements under Schedules FA and FSI are available on the Income Tax Department's official website.

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