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The Income Tax Department has stepped up scrutiny of taxpayers suspected of concealing foreign income and assets, bringing more than 600 people in the Kanpur region under its scanner. Notices and reminders are being issued to individuals who allegedly failed to disclose income earned or assets held abroad, despite filing income tax returns in India.
The cases cover the Kanpur region, which includes parts of western Uttar Pradesh and Uttarakhand. Noida accounts for the highest number of notices, followed by Ghaziabad, Kanpur and Agra. At least 60 cases have been identified in Kanpur city alone. The department is examining whether taxpayers who earned money or made investments overseas complied with the mandatory disclosure requirements under income tax rules.
Officials are focusing on individuals who may have earned income in countries such as the United States, European nations, Australia and the United Arab Emirates but did not report their foreign financial interests in their Indian tax returns. The scrutiny is aimed at identifying discrepancies between the income and assets declared in returns and information available to the department through various channels.
Professionals, Business Owners and Government Officials Among Those Under Scrutiny
The department’s Foreign Assets Intelligence Unit (FAIU) monitors taxpayers who work abroad, purchase property in other countries or invest in foreign equities and stock markets. According to information available, those receiving notices include professionals, business owners and government officials.
Several taxpayers are understood to have filed their income tax returns and paid tax on income earned in India. However, they allegedly left the sections relating to foreign income and assets undisclosed. The Foreign Assets Schedule, commonly referred to as Schedule FA, requires taxpayers to report details of foreign bank accounts, investments, shares, property and other overseas assets.
The disclosure requirement applies to relevant foreign financial interests even when a taxpayer has already paid tax on income earned in India. The department is examining whether individuals omitted such information from their returns and whether the money used to acquire overseas assets came from declared sources.
The scrutiny is not limited to people currently living abroad. Taxpayers who have worked overseas, maintained foreign bank accounts or invested in international financial markets may also come under examination if they fall within the applicable reporting requirements.
Foreign Financial Information and Penalties Under Black Money Act
The FAIU examines suspected cases under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The department can reopen records relating to cases going back as far as 16 years, according to the information available.
Details about foreign assets and transactions can reach the department through information shared by overseas banks, complaints, inputs gathered during searches, confidential sources and domestic or international investigative agencies. Such information helps officials identify possible mismatches between declared income and foreign financial holdings.
Taxpayers receiving notices are being asked to provide evidence explaining the source and purpose of money transferred abroad. They may also be required to establish how foreign assets were acquired and whether the relevant details were disclosed in their income tax returns.
Failure to report foreign assets can attract significant penalties. In some cases, action involving fines of up to Rs 10 lakh has already been taken against individuals accused of withholding information. The department’s current exercise is intended to verify disclosures and examine cases where foreign income or assets may have been omitted.
One-Time Disclosure Scheme Introduced for Smaller Taxpayers
The government has introduced the Foreign Asset Disclosure Scheme 2026, described as FAST-DS 2026, to encourage smaller taxpayers to voluntarily disclose previously unreported foreign income and assets. The scheme has been introduced under the Black Money Act, 2015, and offers a one-time opportunity to regularise eligible overseas holdings.
It covers Indian residents as well as individuals who were non-residents when they acquired the foreign assets. The scheme divides eligible cases into two categories, depending on the value and nature of the undisclosed assets and the source of funds used to acquire them.
The first category covers undisclosed foreign assets or income worth up to Rs 1 crore where the source of investment cannot be explained. Under the stated provisions, taxpayers in this category would be required to pay tax at 30 per cent of the fair market value of the assets as of March 31, 2026.
The second category concerns foreign assets acquired using income taxable under the Income Tax Act, 1961, or foreign income earned while the individual was a non-resident, but not reported in Schedule FA. Taxpayers making a declaration under this category would face a penalty of Rs 1 lakh. The earlier provision allowed for a penalty of up to Rs 10 lakh.
The disclosure window is intended to give eligible taxpayers an opportunity to correct omissions and bring foreign assets within the reporting framework. Meanwhile, the department’s scrutiny across the Kanpur region is continuing, with more than 600 taxpayers facing examination over their overseas income and asset disclosures.
