The Central Board of Direct Taxes (CBDT) is actively pursuing taxpayers who have not been forthcoming about their foreign income and assets. The Finance Ministry announced on Friday, June 20, 2025, that the CBDT is taking action against individuals with foreign income, with a specific focus on those who have been non-responsive to previous inquiries.
This move comes amidst reports indicating a significant increase in Indian money parked in Swiss banks in 2024. While the ministry addressed these reports by clarifying that the data encompasses various types of funds, including deposits from enterprises, banks, and individuals, it also emphasized the ongoing efforts to combat offshore tax evasion.
The CBDT's actions are based on data received under the Automatic Exchange of Information (AEOI) framework, which facilitates the sharing of financial information between India and over 100 jurisdictions, including Switzerland. Through this framework, the CBDT regularly receives detailed financial data about Indian residents and systematically reviews this information to identify taxpayers requiring further scrutiny.
In Assessment Year (AY) 2024-25, the CBDT compared the data shared under AEOI with the information about foreign assets and income declared by taxpayers in their Income Tax Returns (ITRs). This analysis covered all jurisdictions, including Switzerland. As a result, a total of 24,678 taxpayers reviewed their ITRs, and 5,483 taxpayers filed belated returns for AY 2024-25. These revised and belated returns declared foreign assets worth ₹29,208 crore and additional foreign income of ₹1,089.88 crore.
The Finance Ministry stated that suitable action under the existing legal provisions is being considered for taxpayers who remain non-responsive despite these efforts. This may include enforcement and statutory actions as per the law.
The initiative has led to a substantial increase in the number of taxpayers reporting foreign assets and income in their ITRs. For AY 2024-25, a total of 2.31 lakh taxpayers reported their foreign assets and income, marking a 45.17% increase compared to the 1.59 lakh taxpayers who did so in AY 2023-24.
To encourage compliance, the CBDT has also been sending SMS and email messages to taxpayers, urging them to review their ITRs if their foreign assets and income were not reported in the appropriate schedules. This proactive approach, combined with data analysis and information sharing, aims to ensure accurate reporting and prevent tax evasion.
The Ministry of Finance has emphasized that the government is committed to combating offshore tax evasion through international cooperation and the use of technology. By leveraging the AEOI framework and other mechanisms, the CBDT is enhancing its ability to identify and address instances of non-compliance, ultimately contributing to greater transparency and fairness in the tax system.
