Income Tax Department Nudges Taxpayers: Revise ITR for Foreign Assets by Dec 31
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Deadline Alert: Why Dec 31 is Your Last Chance to Avoid the Black Money Act
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The “NUDGE 2.0” Strategy: How Global Data-Sharing Flagged Your Account
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The Forms Matter: Why You Must Switch from ITR-1 to ITR-2 or ITR-3
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Penalty Risks: The ₹10 Lakh Fine and Exceptions You Should Know
The Income Tax Department is keeping a very close eye on your global bank accounts. The thing is, thousands of taxpayers are currently receiving bulk emails about undisclosed foreign assets.
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Actually, these alerts are part of the department’s “NUDGE 2.0” campaign. They are using global data-sharing agreements to match what you reported in your ITR against what they see in overseas records.
As a result, if you hold foreign stocks, ESOPs, or even a dormant bank account abroad, you might be on their radar. Consequently, you have until December 31, 2025, to fix any mistakes (let’s be real, the pressure is on).
And here’s the kicker. You cannot simply “update” your existing ITR-1 or ITR-4. In fact, those simple forms don’t even have the schedules needed for foreign disclosures.
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Basically, if you have even one foreign asset, those forms become invalid. Instead of sticking with the easy forms, you must switch to ITR-2 or ITR-3 to access “Schedule FA” (Foreign Assets).
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Schedule FA: This is where you report bank accounts, shares, and immovable property. Specifically, it covers the calendar year 2024.
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Schedule FSI: Used for disclosing any income earned from those foreign sources, like dividends or interest.
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Peak Balance: You must report the highest value the asset reached during the year, not just the year-end balance. Actually, this is a common point of error.
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Moreover, the penalties for “forgetting” are quite steep. Specifically, non-disclosure can trigger a ₹10 lakh fine under the Black Money Act.
Actually, there is a small bit of relief. No penalty applies if the aggregate value of your foreign assets—excluding immovable property—is ₹20 lakh or less. As a result, small-time investors might be safe from the big fine, but they still need to disclose (those too).
The thing is, the tax department is getting this data through the Automatic Exchange of Information (AEOI). In fact, last year’s drive led to the disclosure of over ₹29,000 crore in foreign assets.
Basically, the system is becoming too transparent to hide anything. Instead of waiting for a formal notice, tax experts suggest revising your return immediately if you received that “nudge” email….
And then Y followed. The portal will close for AY 2025-26 revisions on December 31. Consequently, if you miss this window, you lose the chance to voluntarily come clean.
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