From 28 November 2025, thousands of Indians living in the UAE — specifically those who own property or maintain financial accounts abroad — will start receiving SMS (and email) alerts from the Central Board of Direct Taxes (CBDT).
This is part of the second phase of the CBDT’s so-called “NUDGE campaign”. The objective: to flag “high-risk” taxpayers whose overseas assets or income apparently don’t match what they declared — or did not declare — in their Indian Income Tax Returns (ITRs) for Assessment Year (AY) 2025–26.
Those who receive alerts are being told — in clear language — to declare all their foreign assets correctly (including property, bank accounts, investments, etc.) by 31 December 2025, or risk heavy penalties.
It’s important to note that the campaign “does not apply to Non-Resident Indians (NRIs) who are not Indian tax residents and therefore do not file ITRs in India.”
Why It Matters — Worldwide Reporting & Information-Sharing Is Growing
1. Data Sharing Across Jurisdictions is Here
The push arises from improved information sharing under frameworks like Common Reporting Standard (CRS), and global regulations similar to Foreign Account Tax Compliance Act (FATCA). Under such frameworks, governments automatically exchange information about foreign bank accounts, property holdings, financial investments, and other overseas assets.
That means if an Indian resident — even if living abroad — owns property or maintains bank accounts in the UAE (or elsewhere), Indian tax authorities may now be aware of it through data provided by local UAE authorities, foreign banks, or investment platforms, regardless of self-disclosure.
2. Incentive to Self-Disclose — Before Enforcement
The NUDGE campaign offers a “voluntary compliance window.” By alerting people and giving them a deadline to revise their returns, the tax authorities give an opportunity to come clean before initiating enforcement action.
This not only signals increased seriousness toward offshore non-disclosure, but also underlines a shift from ad-hoc enforcement (raids, checks) toward systematic compliance based on data analytics. Indeed, reports indicate 25,000 “high-risk” individuals are being targeted initially.
3. The Stakes Are High — Hefty Penalties & Heavy Taxes
For those who fail to comply, penalties are substantial. According to public notices summarizing the campaign:
- A fine of ₹1,000,000 (roughly ₹10 lakh) for non-reporting.
- A 30% tax on any unreported income derived from foreign assets.
- In addition, a penalty of up to 300% of the tax owing — depending on the severity/extent of omission.
Given these severe consequences, even previously “unaware” taxpayers or those who assumed non-disclosure would go unnoticed stand to lose heavily if they remain non-compliant.
What This Means for Indian Property Owners in UAE
Many Indians are known to be significant investors in UAE property — particularly in places like Dubai. For years, expatriates have purchased homes, villas, apartments, or investment properties. Under the new campaign, some of these owners may receive alerts, depending on whether they were flagged under CRS/AEOI data analysis. Reports suggest Dubai is already a major hotspot.
If you own property or maintain financial assets abroad, and you are a tax resident of India (i.e. you are required to file ITRs), you now face an imperative to:
- Review previous returns and foreign assets disclosure (especially Schedules like FA — Foreign Assets, or FSI — Foreign Source Income).
- If you find any omission, file a revised return before 31 December 2025.
- If you receive an SMS or email alert from CBDT, treat it as a serious notice — not spam.
On the other hand, if you are an NRI who is not considered an Indian tax resident, and hence do not file ITRs — the alerts do not apply to you.
Why This Campaign Is Significant — Beyond Individual Taxpayers
This campaign underscores a broader shift in global financial transparency. Governments are increasingly leveraging cross-border data exchange to crack down on offshore non-disclosure, tax evasion, and hidden wealth. The NUDGE campaign represents an early example of proactive, data-driven enforcement.
For Indian authorities, it signals a new, scalable approach: identify mismatches between CRS data and declared assets, alert taxpayers, and give a compliance window — rather than relying solely on raids or random audits.
For tax-compliance professionals, real estate consultants, and expatriates — this changes the compliance landscape. International investments, formerly considered discreet or “off the radar,” are now potentially visible, and failure to declare them can carry serious financial consequences.
Key Takeaways — What Property Owners & Expats Should Do
- Don’t ignore an SMS or email from CBDT. Treat it as a real notice — not junk mail.
- Check your ITR for AY 2025–26 (and possibly earlier years) for accurate disclosure of foreign assets using Schedule FA (foreign assets) and Schedule FSI (foreign-source income).
- If you own property abroad and are an Indian tax resident, consider revising your return now — before the 31 December 2025 deadline.
- If you believe you are not liable (e.g. you’re a non-resident taxpayer who doesn’t file ITRs), double-check your status and get professional advice. The campaign does not target NRIs who are not Indian tax residents.
- Use this moment as a wake-up call — global transparency regimes are tightening; cross-border holdings are increasingly under scrutiny.
Final Words
The SMS-alert initiative from CBDT marks a new chapter in cross-border tax compliance — one where data flows and automatic information exchange reduce the possibility of staying “under the radar.” For Indian residents owning property or holding financial assets abroad (including UAE), what once may have felt like a private investment now carries a public compliance responsibility.
If you’re in the UAE, or know someone who is — receiving Dubai properties or maintaining foreign accounts — this is not a moment to ignore. Compliance may involve paperwork and possibly paying additional taxes, but the cost of non-disclosure is far greater.
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