UAE-Based Indian Property Owners Get Tax Alerts
Starting November 28, thousands of Indians who own property or hold financial accounts abroad—including residents of the UAE—have begun receiving SMS and email messages from India’s Income Tax Department. The alerts remind eligible taxpayers to correctly report all foreign assets and income in their Indian tax return by December 31, 2025, or face significant penalties.
The campaign is part of the Central Board of Direct Taxes’ (CBDT) second phase of its Nudge initiative, launched after a press release on November 27. The programme uses financial information shared by more than 100 countries under the Common Reporting Standard (CRS) and the US FATCA framework to identify mismatches in declared offshore assets.
Importantly, the notices do not apply to NRIs who are not Indian tax residents. Those who do not file Income Tax Returns in India have no requirement to report foreign assets and will not receive these alerts.
After reviewing Automatic Exchange of Information (AEOI) data for FY 2024–25, the department has flagged around 25,000 high-risk taxpayers whose offshore holdings do not match their filings for Assessment Year 2025–26. Penalties for non-disclosure are steep: ₹10 lakh for failure to report assets, 30% tax on unreported income, and up to 300% penalty on the tax due.
The first Nudge campaign in 2024 revealed extensive under-reporting, with nearly 25,000 taxpayers disclosing Dh12 billion in foreign assets after receiving alerts. This year, experts say Dubai is emerging as a major focus area, following recent tax raids in India linked to CRS data that revealed millions in undisclosed assets. Indian investors form the largest foreign buyer group in Dubai real estate, contributing 22% of property transactions in 2024 alone.
With CRS-based information flow between India and the UAE now seamless, tax specialists advise immediate compliance. CBDT has also urged corporates and industry bodies such as ICAI to educate members on mandatory foreign asset reporting, warning that many taxpayers may be unaware of their obligations.
If you receive an alert
- Log in to www.incometax.gov.in
- Open your return for AY 2025–26
- Review Schedule FA (Foreign Assets) and Schedule FSI (Foreign Source Income)
- File a revised return before December 31, 2025
This proactive step can help taxpayers avoid heavy penalties and future legal complications.
