The Income Tax Department has uncovered a staggering ₹22,000 Crore worth of undisclosed foreign income and assets through the operations of a specialized campaign aimed at cracking down on tax evasion.
The initiative, launched in November 2024 relies on data obtained through bilateral and multilateral agreements with foreign nations, foreign remittance records, and automatic exchange of information mechanisms with other countries to assimilate the discrepant records.
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The government’s latest drive focused on identifying taxpayers who failed to declare foreign assets such as real estate, bank accounts, securities, and income derived from them, including dividends and interest.
Existing tax laws require individuals to disclose all income, including foreign assets and income gained therein, in their annual income tax returns.
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The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, being the key prevailing statute enacted to thwart tax evasion imposes strict penalties, including fines of up to ₹10 lakh for non-disclosure of foreign income.
The operation was spearheaded by the The Central Board of Direct Taxes (CBDT) by scrutinizing Form 15CC, a quarterly statement of foreign remittances filed by authorized dealers. Additionally, tax authorities analyzed past financial records, including data from the Financial Year (F.Y.) 2020-21 to identify cases calling for high scrutiny.
By October 1, 2024, the Income Tax Department had compiled a list of individuals suspected of holding undisclosed foreign income and assets and proceeded to roll out the campaign in November 2024 to assist taxpayers in accurately reporting foreign income and assets in their income tax returns.
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The non-intrusive design of the campaign was met with good response from concerned individuals, with numerous taxpayers voluntarily declaring their previously undeclared foreign income and assets, resulting in a grand total of ₹22,000 Crore.
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Meanwhile, some have expressed their apprehension of the methodology used by the Income Tax Department to unearth the information, citing concerns of increased governmental scrutiny over their affairs. All said and done, it can be expected that the Government shall continue to undertake similar proactive measures to enforce tax administration in the future.
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