In a significant move to enhance tax compliance, over 30,000 taxpayers have reported foreign assets and income totaling approximately ₹30,300 crore. This surge comes as a result of the Indian government’s innovative ‘nudge’ campaign aimed at encouraging voluntary disclosures among taxpayers. Union Finance Minister Nirmala Sitharaman shared these insights during a recent session in the Lok Sabha, highlighting the campaign’s effectiveness in uncovering previously unreported foreign earnings.

Impact of the ‘Nudge’ Campaign

The initiative specifically targeted 19,501 taxpayers who were identified based on their foreign deposit information held by the Income Tax Department. Through a series of SMS and email communications, these individuals were prompted to revisit their income tax returns for the 2024-25 assessment year.

• Out of those contacted, 11,162 taxpayers took the initiative to revise their returns.
• They reported foreign assets valued at ₹11,259.29 crore and disclosed foreign income of ₹154.42 crore.

This campaign has also resulted in 883 taxpayers changing their residency status from resident to non-resident in their revised filings.

Cumulative Disclosures Show Positive Trends

The momentum continued as 13,516 additional taxpayers stepped forward to declare foreign assets worth ₹7,564 crore and foreign income around ₹353 crore in their revised returns. Sitharaman emphasized the "ripple effect" of the campaign, which cumulatively led to declarations of foreign assets amounting to ₹29,208 crore and foreign income of ₹1,089 crore by 30,161 taxpayers.

Trust-First Approach

In alignment with a ‘trust-first’ strategy, the Central Board of Direct Taxes (CBDT) launched an awareness campaign on November 16 of the previous year. This outreach targeted taxpayers who had not yet reported significant foreign income or assets. The campaign’s success is evident, with about 62% of nudged taxpayers responding positively by voluntarily updating their returns.

• Voluntary disclosures have seen a remarkable rise from 60,000 taxpayers in 2021-22 to 231,452 taxpayers in the 2024-25 assessment year.
• This represents a staggering 45.17% growth compared to the previous year.

Historic Tax Relief Measures

In addition to discussing the nudge campaign, Sitharaman highlighted the Finance Bill 2025, which she described as offering "unprecedented tax relief." The bill anticipates a 13.14% growth in personal income tax collection, which she asserts is a realistic expectation.

• The government has also increased the income tax rebate for the salaried class from ₹7 lakh to ₹12 lakh per annum.
• After including standard deductions, the rebate for salaried individuals will reach ₹12.75 lakh annually.

These initiatives not only aim to streamline tax compliance but also recognize the contributions of the middle class to the economy, marking a pivotal moment in India’s tax policy landscape.

For further insights into tax regulations and updates, consider exploring more about the Finance Bill 2025 and its implications on taxpayers.