The Income Tax Department has taken enforcement action against non-compliant individuals holding undisclosed foreign income and assets. The Ministry of Finance revealed on Friday that 5,483 taxpayers have filed belated returns for Assessment Year (AY) 2024-25, disclosing foreign assets worth Rs 29,208 crore and additional foreign income of Rs 1,089.88 crore.
The development follows fresh data from the Swiss National Bank showing that Indian money parked in Swiss banks surged more than threefold in 2024, reaching 3.5 billion Swiss francs. The dramatic rise, fueled by increased deposits via local branches and financial institutions, has prompted tighter scrutiny of cross-border financial flows.
According to the Finance Ministry, 24,678 taxpayers reviewed their income tax returns (ITRs) following system-generated alerts and communication from the Central Board of Direct Taxes (CBDT). As a result of a system-driven compliance approach, 231,000 taxpayers reported foreign assets and income in AY 2024-25, marking a 45.17% increase from 159,000 in the previous assessment year.
"In cases of continued non-compliance, enforcement and statutory actions are being taken as per extant law," the ministry stated.
The government attributed the increase in voluntary compliance to heightened awareness campaigns and the use of data analytics to match ITR disclosures with information received under the Automatic Exchange of Information (AEOI) framework. This verification covered all relevant jurisdictions, including Switzerland.
To ensure transparency, the tax department also sent targeted SMS and email reminders to taxpayers who had not correctly disclosed foreign income and assets in their ITRs. The initiative aimed at encouraging taxpayers to revisit and rectify discrepancies in their returns.
India currently receives financial account information from over 100 countries under the AEOI regime. Switzerland, in particular, has been sharing annual financial data of Indian residents since 2018, with the first exchange taking place in September 2019. These exchanges have continued seamlessly, allowing Indian authorities to track offshore holdings more effectively.
The Finance Ministry emphasized that international cooperation and real-time data sharing have become key tools in the fight against offshore tax evasion, reinforcing India's commitment to financial transparency and tax compliance.
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