6,734 taxpayers revised their residential status to Non-Resident
With scrutiny of the data, government sources revealed, “24,678 taxpayers reviewed their ITRs, and 5,483 filed belated returns for AY 2024-25, declaring foreign assets worth ₹29,208 crore and additional foreign income of
₹1,089.88 crore. Not just this, 6,734 taxpayers updated their residential status from ‘Resident’ to ‘Non-Resident.'”
The declaration is part of a special drive initiated by the Income Tax Department, which opened a special window from November 16, 2024, to December 31, 2024, asking taxpayers to declare their foreign assets. During this window, the tax department encouraged taxpayers to revise their Income Tax Returns (ITRs) for Assessment Year (AY) 2024-25 and accurately disclose their foreign income and assets.
Government sources also shared that “62% of nudged taxpayers responded positively, and the campaign saw a significant increase in voluntary disclosures of foreign income and assets. This number grew substantially from 60,000 in AY 2021-22 to 2,31,452 in AY 2024-25, marking a 45.17% growth compared to the previous year.”
How did the govt get ₹29,000 crore in declarations?
According to government sources, the declaration is part of the Income Tax Department’s strategy, under which it leveraged information received through the Common Reporting Standards (CRS) and the Foreign Accounts Tax Compliance Act (FATCA), 2010. The tax department sent targeted SMS and email notifications to 19,501 taxpayers with high foreign account balances or significant foreign income. These communications encouraged taxpayers to revise their ITRs and disclose their foreign assets and income.
“In September 2024, India received financial information from over 108 countries regarding foreign accounts and income in the form of interest and dividends earned outside India,” government sources said.
Combating tax avoidance and CRS
Notably, India has been actively combating tax avoidance through foreign assets and has taken a proactive stance on financial transparency, boosted by its early adoption of the Common Reporting Standards (CRS). CRS facilitates the automatic exchange of financial information between over 125 countries.
“This includes details about foreign accounts, account balances, and income from dividends and interest. Since 2018, India has been receiving this data, enabling the Income Tax Department (ITD) to identify discrepancies and enhance tax compliance,” government sources added.
The sources also noted that the “Trust First” approach, which emphasises voluntary compliance over enforcement, was crucial in helping the tax department secure these declarations.