Indore (Madhya Pradesh): This development may come as a shock to several city residents—particularly IT professionals—who have accumulated Foreign Assets (FA) and Foreign Source Income (FSI) but concealed these details in their annual Income Tax Returns (ITR). Names of more than 20 such Indian residents from the city have surfaced on the radar of the Income Tax Department (ITD).
However, instead of imposing immediate penalties, the Tax Deduction at Source (TDS) wing of the ITD is allowing them to voluntarily correct their filings by submitting revised ITRs by December 31 under the Non-Intrusive Usage of Data to Guide & Enable (NUDGE 2.0) campaign.
Under information-exchange treaties with friendly nations, the Government of India (GoI) regularly receives classified data about Indian residents who hold or generate income from assets abroad. This includes ownership of shares of foreign companies, overseas bank accounts, mutual funds, immovable properties and more.
The GoI forwards this information to the Central Board of Direct Taxes (CBDT) for further action. After analysing inputs received through partner countries, the CBDT identified over 20 income-tax payers from the city who qualify as Indian residents under Section 6 of the Income Tax Act, 1961 (i.e., they have not stayed abroad for 182 days or more) but failed to disclose their FA and FSI for FY 2024-25.
A senior ITD official, speaking on the condition of anonymity, said:
“After identifying employees working in IT companies, instead of immediately issuing notices, the CBDT informed their employers that some of their staff members have been traced. They have been asked to file revised ITRs by December 31, disclosing their FA and FSI under NUDGE 2.0. This amnesty-style campaign has been running since November 20.”
The initiative includes SMS and email alerts to high-risk taxpayers and their employers, based on data received under the Automatic Exchange of Information (AEOI) framework. Taxpayers have been advised to review and revise their ITRs, if required, to avoid action under the Income Tax Act, 1961 and the Black Money Act (BMA) 2015. As per rules, penalties for suppression of foreign assets may go up to three times the amount of tax evaded.
Meanwhile, the TDS section and the Investigation Wing of the ITD, Indore, jointly conducted outreach programs at four software development companies in the city. Officials explained FA and FSI disclosure requirements and guided IT professionals on correctly filing relevant schedules in their returns.
The outreach sessions were held under the leadership of Bharti Singh, Commissioner of Income Tax (CIT-TDS), MP & Chhattisgarh, Bhopal, and under the guidance of Joint Commissioner (TDS) Sanjeev Kumar and deputy director, Investigation Wing, Rishi Kumar. Detailed presentations were delivered by deputy commissioner (TDS) Ganesh Tengle and income tax officer (ITO-TDS) Priya Ranjan.
