In a major push against offshore tax evasion, the Central Board of Direct Taxes (CBDT) has uncovered substantial undeclared foreign assets and income, following a systematic scrutiny of income tax returns. The action comes as part of India’s data-driven enforcement initiative under the Automatic Exchange of Information (AEOI) framework with over 100 countries, including Switzerland.The CBDT reviewed the income tax returns (ITRs) of 24,678 taxpayers where foreign assets and income were suspected of being undisclosed. Pursuant to targeted outreach through SMS and emails urging corrective action, 5,483 taxpayers filed belated returns for assessment year 2024–25, collectively declaring foreign assets worth ₹29,208 crore and foreign income of ₹1,089.88 crore, the Finance Ministry said in a press release.
The scrutiny was based on financial information received from foreign jurisdictions under the AEOI framework, wherein countries exchange account-level financial details of foreign residents. Switzerland, a key partner in this process, has been providing annual data about Indian account holders since 2018, with the first transmission made in 2019. These disclosures include accounts even suspected of financial irregularities.
ALSO READ | Exclusive | FM flags ₹34,000 crore GST evasion, directs CBIC to bridge detection-recovery gap: Sources“For AY 2024-25, CBDT compared the data shared under AEOI with the information about foreign assets and income filed in the ITRs by the taxpayers, for the purpose of verification. The analysis covered all jurisdictions, including Switzerland. Additionally, SMS and Emails were sent to various taxpayers with a request to review their ITRs, where foreign assets and income were not reported in the appropriate Schedules of ITR,” the press statement said.It added that “as a result, a total of 24,678 taxpayers reviewed their ITRs and 5,483 taxpayers filed their belated return for the A.Y.2024-25, reporting foreign assets valuing to ₹29,208 crores and additional income of ₹1,089.88 crores as foreign income. Suitable action under the extant provision of law is under consideration for non-responsive taxpayers.”“The initiative has resulted in substantial growth of taxpayers reporting foreign assets and income in ITR for AY 2024-25. A total of 2.31 lakh taxpayers have reported their foreign assets and income in AY 2024-25, witnessing growth of 45.17% over 1.59 lakh taxpayers in AY 2023-24,” the press statement said.
“It is further stated that Switzerland has been providing annual financial information about Indian residents since 2018 under the Automatic Exchange of Information (AEOI) framework. The first data transmission to Indian authorities occurred in September 2019, and the exchange has continued regularly since then, covering even those accounts suspected of involvement in financial irregularities,” the statement went on.The Central Board of Direct Taxes (CBDT) regularly undertakes a systematic review of data so received and identifies taxpayers whose cases require further verification. Such verification is carried out through different modes, including search and survey actions, open enquiries, etc.The tax department confirmed that enforcement and statutory actions are underway against non-responsive taxpayers. These include investigations through searches, surveys, and open enquiries.The CBDT further clarified that while media reports have highlighted an increase in deposits by Indian entities in Swiss banks, such figures include a wide array of deposits — from enterprises, financial institutions, and individuals — and do not directly indicate unaccounted wealth. Authorities emphasised that India’s tax enforcement relies on verified data exchanged under global frameworks, not mere deposit trends.The board highlighted that growing awareness, transparency initiatives, and system-driven alerts have contributed to increased voluntary compliance by taxpayers in declaring foreign income and assets.“Taxpayers are revisiting their returns and making appropriate disclosures. This reflects improved compliance culture and the effectiveness of the department’s integrated approach,” a senior official said.The crackdown underscores the government’s ongoing commitment to tackling offshore tax evasion and ensuring transparency in foreign asset disclosures under existing tax laws.ALSO READ | Exclusive | FM to review income tax dept on June 23, refund delays, litigations in focus
