Varanasi: The Income Tax Department has tightened its scrutiny on taxpayers who attempted to conceal income by routing investments abroad. More than 2,000 taxpayers across Purvanchal, including Varanasi, Jaunpur, Ghazipur and Mirzapur districts, have been placed under the tax department’s radar for failing to disclose foreign income and overseas assets in their income tax returns.
According to departmental findings, these individuals filed their income tax returns but did not report details of properties, financial assets and investments held outside India. The department has now issued alerts, granting them a final opportunity until December 31 to submit complete disclosures of foreign income, expenditure and investments. Officials have warned that failure to comply within the stipulated timeline will invite heavy penalties and strict legal action under the Income Tax Act.
Varanasi Accounts for Highest Number of Cases
Departmental data shows that over 500 cases originate from Varanasi alone, making it the district with the highest concentration of non-disclosure cases in the region. Those under scrutiny include doctors, university professors, large traders, professionals and businesspersons.
Investigations revealed that several taxpayers invested substantial sums in overseas insurance funds, pension-linked mutual funds, international equity markets and foreign financial instruments. In many instances, income generated from these investments was not reported in Indian tax filings, resulting in potential tax evasion.
International Data-sharing Exposed Discrepancies
Senior tax officials said that much of the information came through international automatic exchange of information frameworks, including FATCA (Foreign Account Tax Compliance Act) and CRS (Common Reporting Standard). These mechanisms allow tax authorities to receive financial data from foreign jurisdictions, enabling them to match overseas investments with domestic tax declarations.
“In several cases, overseas assets were clearly traceable, but the corresponding income was missing from returns filed in India,” an official said, adding that such omissions are treated as serious violations.
Clear Warning in Notices Issued
The notices sent to taxpayers explicitly state that incomplete or inaccurate disclosures will attract penalties, interest liabilities and prosecution where applicable. The department has emphasised that the current window is the last opportunity for voluntary compliance.
For the Assessment Year 2025–26, taxpayers who have already filed returns but omitted foreign income or asset details may still file revised or updated returns to regularise their filings before the deadline.
Alerts Being Sent via SMS and Email
To ensure timely communication, the Income Tax Department is sending alerts through SMS and registered email addresses. Officials have advised taxpayers to always provide personal mobile numbers and active email IDs while filing returns so that critical notices and alerts reach them directly.
The department said this digital outreach is aimed not only at enforcement but also at preventing taxpayers from inadvertently falling into non-compliance due to lack of awareness.
Awareness Drive at BHU
As part of its outreach efforts, the Income Tax Department organised an awareness programme at Banaras Hindu University’s central office on Monday. The session was led by Additional Director of Income Tax (Investigation) – FAIU, Adita Singh, who explained the legal requirements for declaring foreign assets and income in tax returns.
The programme was attended by income tax officials, chartered accountants, advocates and several BHU faculty members. Detailed guidance was provided on disclosure norms, reporting formats and common errors made by taxpayers.
Officials Urge Voluntary Compliance
Speaking at the programme, Adita Singh said taxpayers have been given time until December 31 to disclose foreign assets and income.
“In some cases, non-disclosure happens due to lack of information or misunderstanding of reporting requirements. However, once the deadline passes, the department will proceed with penalty and enforcement action,” she said.
The latest action sends a clear message that overseas investments are no longer beyond the tax department’s reach, and attempts to hide income abroad will face firm consequences.
