CBDT’s Voluntary Disclosure Campaign Drives Record Offshore Wealth Reporting
In a significant step towards enhancing tax compliance and financial transparency, the Central Board of Direct Taxes (CBDT) has successfully encouraged 30,161 taxpayers to voluntarily declare foreign assets worth ₹29,208 crore and foreign income of ₹1,089.88 crore for Assessment Year (AY) 2024-25.
The disclosures were made as part of the CBDT’s Compliance-Cum-Awareness Campaign, which focuses on voluntary tax compliance and urges individuals to accurately report offshore assets and income in their Income Tax Returns (ITRs).
Key Takeaways from CBDT’s Compliance Drive
- 30,161 taxpayers disclosed offshore assets and income in response to the compliance campaign.
- ₹29,208 crore worth of foreign assets and ₹1,089.88 crore in foreign income were voluntarily reported.
- 5,483 taxpayers filed belated ITRs, while several others revised previous filings.
- 6,734 individuals updated their residential status from Resident to Non-Resident (NRI).
- The initiative aligns with India’s Common Reporting Standard (CRS) framework, ensuring greater tax transparency.
How the Compliance Drive Led to Increased Disclosures
CBDT launched the Compliance-Cum-Awareness Campaign on November 17, 2024, urging taxpayers to voluntarily disclose foreign assets and income in revised tax filings.
By adopting a data-driven and non-intrusive approach, tax authorities reached out to 19,501 taxpayers through SMS and email notifications, flagging high-value foreign accounts and significant offshore earnings.
Additionally, the Income Tax Department conducted 30 outreach programs, including seminars, webinars, and workshops, engaging over 8,500 participants. Social media campaigns, brochures, and detailed explanatory materials helped simplify compliance procedures.
Sharp Rise in Foreign Asset Disclosures Over the Years
The number of taxpayers voluntarily disclosing foreign assets has increased significantly over the last four years.
| Assessment Year (AY) | Taxpayers Disclosing Foreign Assets |
|---|---|
| AY 2021-22 | 60,000 |
| AY 2022-23 | 1.2 lakh |
| AY 2023-24 | 1.59 lakh |
| AY 2024-25 | 2.31 lakh (45.17% increase YoY) |
The surge in voluntary disclosures reflects greater awareness among taxpayers and stringent compliance measures by tax authorities.
Government’s Use of Global Data Exchange to Track Offshore Wealth
India has been an early adopter of the Common Reporting Standard (CRS), receiving detailed financial data on overseas accounts since 2018.
- In September 2024, India obtained foreign account information from 108 jurisdictions, detailing:
- Account balances
- Interest and dividend earnings
- Capital gains and other financial transactions
- The Foreign Account Tax Compliance Act (FATCA) agreement with the United States further strengthens India’s access to offshore financial data.
Why This Compliance Campaign Matters
1. Increased Tax Transparency and Compliance
By encouraging voluntary declarations, the campaign ensures better adherence to tax laws and reduces tax evasion related to offshore holdings.
2. Data-Driven Approach for Efficient Monitoring
With AI-based analytics and data-sharing agreements with foreign tax authorities, the Income Tax Department can detect discrepancies more effectively.
3. Growing Awareness and Legal Consequences
The sharp increase in self-declared foreign assets indicates that taxpayers are becoming more aware of their obligations under India’s Black Money (Undisclosed Foreign Income and Assets) Act, 2015.
Looking Ahead: Strengthening India’s Global Financial Oversight
The Indian government is expected to further intensify compliance measures in the coming years. With continuous information exchange through CRS and FATCA, authorities will have even greater visibility into undeclared foreign wealth.
By combining voluntary compliance initiatives with strict enforcement measures, the CBDT aims to create a transparent and accountable tax system, discouraging offshore tax evasion while ensuring fair taxation for all.