Starting November 28, 2025, thousands of Indians who own property or have financial accounts abroad, including those based in the UAE, started receiving SMS and email alerts from the Central Board of Direct Taxes (CBDT), India’s tax authority. The purpose of these alerts is straightforward: they remind recipients to declare all foreign assets and foreign income accurately in their Indian tax return for the assessment year 2025–26, by December 31, 2025. If they don’t, they risk facing heavy penalties.

This effort is part of the second phase of CBDT’s so-called “Nudge campaign”—a push for voluntary compliance using information now available to authorities under global data-sharing systems.

Why the Indian government is doing this now

1. Under international agreements like the Common Reporting Standard (CRS) and the FATCA framework, more than 100 countries—including the UAE—now regularly share financial information. This includes data about foreign bank accounts, investments, income, and property ownership.
2. With that data, the tax authorities can match what individuals have declared in their Indian tax returns against what’s recorded abroad. In the recent review of data for the financial year 2024–25, around 25,000 taxpayers were identified as “high-risk”—meaning their overseas asset declarations did not match the CRS-derived data.
3. The government wants to close a gap: many Indians owning property abroad may have previously underdeclared or not declared their offshore holdings. The first phase of the Nudge campaign in November 2024 already brought thousands of disclosures – and huge amounts of previously undeclared foreign assets – into the official tax net.

What are the penalties, and why are they steep

If someone fails to declare foreign assets or income, the consequences are significant:

1. There is a base penalty of ₹10 lakh (about ₹1,000,000) for failing to report foreign assets.
2. A 30% tax on any unreported foreign income.
3. And in more serious cases,a penalty of up to 300% of the tax due (i.e., triple the tax amount) for concealment or misdeclaration.

As one tax specialist described the situation, a “fine of Dh 41,000 today can easily turn into Dh 400,000 or more if the case escalates.”

It’s important to note that not every Indian in the UAE will get this SMS/email — and not everyone is required to act. The alerts target those who are considered Indian tax residents and file Income Tax Returns (ITRs) in India.

1. If you are a Non-Resident Indian (NRI) and do not file Indian tax returns, you’re not required to declare foreign assets. Such persons will not receive the Nudge alerts.
2. But if you are an Indian tax resident (even if living abroad), and you own foreign property, bank accounts, investments or earn foreign income,the alert applies to you, and you must ensure your foreign assets are properly declared in the return.

Tax experts have also warned that many individuals may simply be unaware of this requirement — especially those who thought they were safe because they live abroad. For them, this campaign is a “wake-up call.”

What to do if you get an alert: Steps to comply

If you receive an SMS or email alert from your tax department, here’s what to do:

1. Log in to the official portal — the one specified in the alert (the official site of the Indian tax authority).
2. Open your latest return (for Assessment Year 2025–26) and examine Schedule FA and Schedule FSI
3. For any foreign property, bank accounts, overseas investments, or foreign income, check whether they are correctly declared.
4. If anything is missing or incorrectly declared, file a revised return before December 31, 2025.
5. If you need help or are unsure about your status (resident vs non-resident for tax, what counts as a foreign asset, etc.), consider consulting a qualified tax adviser — especially if you own property or have income abroad.

This window is being presented as a voluntary compliance opportunity — but ignoring it could mean facing heavy fines, tax on undisclosed income, and possibly even triple-tax penalties if examined later.

Why this matters – and what it signals for the future

This campaign and alert initiative is not a one-time warning — it likely marks a broader shift in how cross-border assets are tracked and taxed for Indians. A few reasons why this matters:

1. Thanks to CRS/FATCA, global financial transparency is growing. For Indians with overseas property or financial holdings, trying to stay “off-grid” for tax is becoming increasingly difficult.
2. The government appears to be giving a “last chance” window to come clean – but with stiff penalties for failure. For many diaspora Indians, this may be the first time they realize that foreign property or investments require explicit declaration in India.
3. For future overseas buyers, this will likely act as a strong deterrent against non-disclosure. People may start treating overseas property/investment as fully reportable – making compliance a central part of their financial planning.
4. From a policy perspective, this also helps India widen its tax base, curb money laundering risks, and reduce black money flows by bringing offshore wealth into the official record.

How to avoid misunderstandings 

Because this news has several nuances, there are possible misunderstandings. Some clarifications:

1. Not all Indians abroad need to worry—only those who are Indian tax residents (i.e., declare ITRs in India). NRIs who do not file Indian tax returns aren’t required to declare foreign assets and will not be asked for it.
2. Not all foreign assets are automatically taxable — but they must be reported. Declaring a foreign property or bank account doesn’t always mean you pay new tax; what matters is accurately disclosing, otherwise the penalties apply.
3. This is not a scam or spam. Unlike random phishing SMS or misleading marketing texts (which are also common in the UAE), these alerts are sent by the legitimate tax authority. So if you receive it, treat it seriously.
4. Timing matters. The deadline to rectify and refile returns is December 31, 2025. Missing that could trigger penalties, so timely action is important.

What this means for Indians in the UAE — practical takeaways

For Indian expatriates in the UAE (or any country covered under CRS/FATCA) who own property or maintain financial accounts abroad:

1. Check if you file Indian ITRs. If yes, you need to check whether you have declared all your foreign assets and foreign income.
2. Go through your overseas holdings carefully. Properties, bank accounts, investments, business income, rental income — all count.
3. Be ready to update your tax return before the deadline. It’s a good time to gather documents and records so that your declaration is accurate.
4. Seek professional advice if needed. Tax laws, residency status, and rules like Schedule FA/FSI can be confusing. An Indian tax consultant can help.
5. Don’t ignore the alert thinking you’re “out of reach.” With global data sharing, the authorities likely already know about your overseas holdings — and ignoring could be costly.

Conclusion

The SMS alerts from India’s tax department mark a new phase in cross-border taxation for Indians abroad. For many Indians with property or investments in the UAE — especially those who also file Indian tax returns — this is a clear signal: offshore assets and foreign income must be reported, and now. The deadline of December 31, 2025, is real. The penalties for non-compliance — ₹10 lakh fine, 30% on undisclosed income, and possibly up to triple the tax amount — are steep.

For Indians in the UAE, this is more than just a reminder: it’s a call to review, declare, and comply. Ignoring it may cost far more than the effort to be transparent.

For any clarifications or queries, please feel free to reach out to us at admin@fintracadvisors.com 

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