SMS alerts go out to Indian property owners in UAE to avoid heavy penalties

Mangalore Today News Network

UAE, Nov 29, 2025: Starting November 28, thousands of Indians who own property or maintain financial accounts abroad — including those based in the UAE — will begin receiving SMS and email alerts from India’s Income Tax Department.

The message is direct – declare all foreign assets correctly in your Indian tax return by December 31, 2025 or face heavy penalties.

In a press release dated November 27, the Central Board of Direct Taxes (CBDT) announced that the second phase of its Nudge campaign, a compliance initiative designed to encourage voluntary reporting, would commence on November 28. The outreach relies on financial data shared by more than 100 jurisdictions under the Common Reporting Standard (CRS) and the US Foreign Account Tax Compliance Act (FATCA).

CBDT’s Nudge campaign, however, does not apply to Non-Resident Indians (NRIs) who are not Indian tax residents and therefore do not file Income Tax Returns (ITRs) in India. These NRIs have no obligation to declare foreign assets and they won’t receive Nudge alerts.

After analysing Automatic Exchange of Information (AEOI) data for the financial year 2024–25, the department has identified around 25,000 high-risk taxpayers whose overseas assets do not match what they declared in their latest returns for Assessment Year (AY) 2025–26.

Penalties for failing to disclose assets are substantial: a fine of one million Indian rupees (approximately Dh41,000) for non-reporting, 30 per cent tax on any unreported income, and a penalty of up to 300 per cent of the tax due.

CBDT officials describe the initiative as a voluntary compliance opportunity, but warn that ignoring the alert could invite much stiffer action later.

The first Nudge campaign in November 2024 revealed the scale of offshore wealth previously missing from Indian filings. According to CBDT figures, 24,678 taxpayers disclosed Dh12 billion in foreign assets and Dh448 million in foreign-source income after being nudged to review their returns.

Indian media outlets and tax experts say Dubai is emerging as one of the main hotspots this time. Reports in The Economic Times, CNBC-TV18 and The Hindu BusinessLine, quoting Income Tax Department sources, say recent raids in Delhi, Mumbai and Pune were triggered by Dubai-specific data shared under CRS, unearthing millions of dollars in undisclosed assets.

Indians top the list of foreign property buyers in Dubai for several years running. In 2024 alone, Indian buyers accounted for 22 per cent of all Dubai property transactions and invested roughly Dh150 billion, according to real estate consultancies and Dubai Land Department figures widely cited in Indian and UAE media. Many of these buyers now need to correctly fill Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income) in their Indian returns if they qualify as tax residents in India.

Tax specialists say the increase in cross-border reporting is also driven by tighter information flows between India and the UAE. Even bank accounts, investment products and business holdings in the Emirates are now visible to Indian authorities through the CRS network.

CBDT has urged corporates and professional bodies, including the Institute of Chartered Accountants of India (ICAI), to inform employees and members about mandatory foreign asset reporting, warning that many individuals may simply be unaware they must declare offshore holdings.

A senior Indian tax consultant in Dubai told Khaleej Times: “The data-sharing between India and the UAE is now seamless. A penalty of Dh41,000 today can easily turn into Dh400,000 or more if the case escalates. Fixing your return before the deadline is the safest option.”

What to do if you receive an alert

If you receive the alert, the steps are simple:

1. Log in to www.incometax.gov.in

2. Open your return for Assessment Year 2025–26

3. Review Schedule FA and Schedule FSI carefully

4. File a revised return before 31 December