Latest Updated 28th December 2025

Introduction

Over the past few weeks, thousands of taxpayers have received a compliance email from the Income Tax Department regarding non-reporting of foreign assets and foreign income in AY 2025-26. The subject and content of the email have caught a lot of attention because it mentions that foreign jurisdictions have shared financial data related to your foreign bank accounts, interest, dividends, and other overseas assets, and your ITR does not reflect this information.

 

Foreign assets disclosure email AY 2025-26-Email Lines are below:-

“INCOME TAX ACTION REQUIRED SUNIL KUMAR (XXXXX1572X) by 31st December. Data has been shared by the USA authorities showing that you held/earned foreign assets/income in the USA during Calendar Year 2024. However, Schedule Foreign Assets was not included in your ITR for AY 2025-26. Please revise your tax return by 31st December to reflect these foreign assets/income. To do this, visit https://www.incometax.gov.in .Log in and navigate to “”e-File”” “

A few key lines from the email look like this:

• “Data has been shared by foreign jurisdiction(s) concerning foreign assets and income, such as bank account, interest, dividends, etc.”
• “Schedule Foreign Assets has not been filled in your return for AY 2025-26.”
• “You had reported foreign assets and/or foreign income in AY 2024-25; however, such details have not been reported this year.”
• “Non-disclosure or inaccuracy may invite action under the Income-tax Act, 1961 and the Black Money Act, 2015.”

Because of these lines, terms like Schedule FA AY 2025-26, foreign asset reporting India, CRS reporting mismatch India, Black Money Act penalties, and revised return due date have become highly searched on Google in the last few days.

Here’s the thing — this email is not random. The department has received updated CRS (Common Reporting Standard) information from various countries, and their system has matched your name/PAN with foreign asset data. If your ITR did not include Schedule FA or Schedule FSI this year, the mismatch gets flagged automatically.

Let’s break it down clearly.

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Why You Received This Email

1. Foreign countries sent your financial information to India

Under global agreements and CRS, foreign authorities share data on:

• Bank accounts
• Interest
• Dividends
• Securities
• ESOP/RSU holdings
• Insurance-linked investments
• Any other reportable financial asset

Even if the balance is small or income is NIL, the data still flows into the system.

2. Your ITR for AY 2025-26 does not include Schedule FA

If you are a Resident under the Income Tax Act and you hold any foreign asset, you must report it in Schedule FA every year — even if:

• There is no income
• The account is dormant
• You did not transact
• You already paid tax abroad

Schedule FA reporting is mandatory based on holding, not income.

3. You reported foreign assets last year (AY 2024-25)

This is the biggest trigger.
If you filled Schedule FA last year but skipped it this year, the system assumes:

• The account still exists, or
• The foreign income continues, or
• The asset was not legally closed

This mismatch leads directly to the compliance email.

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Legal Basis for Reporting – Income Tax Act + Black Money Act

Under Income Tax Act, 1961, every resident taxpayer must report:

• All foreign assets
• All foreign income
• Foreign tax credit

Under Black Money (Undisclosed Foreign Income and Assets) Act, 2015, nondisclosure triggers:

• ₹10,00,000 penalty per asset per year
• Prosecution in severe cases
• Assessment/scrutiny proceedings

This is why the department treats foreign asset reporting very seriously.

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What You Should Do Now (Actionable Steps)

1. Re-check your residential status

Only residents need to file Schedule FA.
If you became NRI in FY 2024-25, the email might not apply — but ensure your ITR has the correct residential status.

2. Revisit your ITR for AY 2025-26

Open your filed return and verify:

• Is Schedule FA filled?
• Is Schedule FSI filled (if foreign income exists)?
• Is Schedule TR filled (if foreign tax credit is claimed)?

If not, you need to correct it.

3. Identify foreign assets you held during Calender Year 2024

Examples:

• Overseas savings/current accounts
• Foreign brokerage accounts
• ESOPs/RSUs (vested or unvested)
• Mutual funds and ETFs abroad
• Crypto held on foreign exchanges
• Pension/retirement accounts
• Foreign company shares

Even a zero-balance or unused account counts.

4. File a revised return (ITR-2 or ITR-3)

How to Revise ITR for Foreign Assets Disclosure AY 2025-26: Step-by-Step

Deadline: 31 December 2025

5. Keep foreign statements ready

Maintain:

• Year-end bank statements
• Brokerage reports
• 1099 forms (for US taxpayers)
• ESOP/RSU statements
• Foreign tax payment proofs

These may be required if scrutiny starts.

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Common Practical Scenarios

1. My foreign bank account has zero balance. Should I report?

Yes. Schedule FA is based on ownership, not income.

2. I closed the account during the year. Do I still report?

Yes, if it existed at any time during FY 2024-25.

3. I am NRI this year. Should I fill Schedule FA?

No. NRIs are not required to file Schedule FA.
But ensure your residential status is correctly updated.

4. I forgot to fill Schedule FA. Will I get a penalty?

Not immediately.
If you file a revised return correctly, the department usually does not initiate penalties.

5. I already filed ITR-1. What now?

Switch to ITR-2/3 and revise.

6. What if the foreign data is wrong?

Still revise your return correctly and retain documentation.
If a query comes later, you can share your explanation.

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FAQs: Foreign Asset Compliance Email AY 2025-26

Why did so many taxpayers get this email?

Because India received updated CRS data for FY 2024-25, and many ITRs lacked Schedule FA this year.

Is this a legal notice?

No. It is an advisory and a red-flag alert. But ignoring it can trigger scrutiny.

Do I need to reply to the email?

No written response required.
Just revise your return if needed.

What happens if I ignore it?

You risk:

• Scrutiny
• Penalties
• Black Money Act proceedings

Does the ₹10 lakh penalty apply automatically?

No. It applies only after due process, and usually only if genuine non-disclosure exists.

Do I have to report ESOPs and RSUs?

Yes. Even unvested foreign stock benefits must be disclosed.

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Final Recommendation

If you hold or held any foreign asset — even a simple overseas savings account or employer-provided ESOP — revise your Income Tax Return and file Schedule FA accurately. With global data sharing and CRS reporting, mismatches get flagged immediately.

Filing the revised return before 31 December 2025 is the simplest and safest way to avoid legal issues.

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Disclaimer

This article offers general guidance. Foreign asset compliance depends on individual facts, residency rules, and documentation. Always consult a qualified professional for personalised assistance.

Need Expert Help?

For support with foreign asset reporting, revised ITR filing, Schedule FA, or scrutiny matters, reach out to:

CA Neeraj Bansal
N C Agrawal & Associates
Specialised in foreign income reporting, compliance management, and tax litigation.