The Central Board of Direct Taxes (CBDT) has issued a notification under Section 239 of the Income Tax Act, 2025, and Rule 245(2) of the Income Tax Rules, 2026, authorizing the Director General of Income-tax (Systems), Delhi, to upload foreign income received under the Automatic Exchange of Information (AEOI) framework directly into taxpayers' Annual Information Statement (AIS) / Form 26AS. According to latest reports, this directive represents a significant shift in how foreign income information is shared with taxpayers, providing them with access to data that has previously been available only to tax authorities. The Income Tax Department had already begun shifting to a non-intrusive, technology-driven approach in 2023 by sending compliance and awareness messages to taxpayers whose foreign assets or bank accounts, shared by overseas jurisdictions under the AEOI framework, did not match their income tax returns.
CA Mrinal Mehta, Treasurer of Bombay Chartered Accountants' Society (BCAS), explained that the benefit is transformative as taxpayers finally gain visibility into the department's files they have been reading for nearly a decade. As reported by Zee News, this information from foreign tax authorities under CRS and FATCA frameworks has shaped return scrutiny, but taxpayers had no sight of it until now. The AIS entry converts an audit trigger into a filing aid, allowing taxpayers to check records before filing rather than defending them afterwards, with legacy coverage for calendar years 2022, 2023 and 2024 to be uploaded within 90 days of the month in which the department receives it. Individuals filing income tax returns will need to ensure that all foreign assets are accurately declared in the "Schedule FA" section of the Income Tax Return (ITR), with foreign-source income including dividends, interest and other earnings from abroad also requiring proper disclosure to avoid discrepancies between the ITR and AIS information.
Taxpayers can now access their foreign asset information through the income tax e-filing portal by opening the AIS through the Compliance Portal and selecting the "Foreign Assets Information" report. According to official sources, the information is available only to the concerned taxpayer through secure login credentials, and taxpayers can download the information for a selected calendar year in PDF format. The department is also sending SMSs and emails to taxpayers informing them about the new feature and reminding them to correctly report foreign assets and foreign income while filing income tax returns for Assessment Year 2026-27, which refers to income earned during the financial year 2025-26. Taxpayers can also seek assistance through "Kar Saathi", the department's AI-powered virtual assistant on the e-filing portal.
According to Vijaykumar Puri, partner at VPRP & Co LLP, Chartered Accountants, the most important distinction for taxpayers is that taxability and disclosure are not the same thing. Many taxpayers follow the logic that if there is no income, there is no tax obligation, but this does not apply to foreign assets. For Resident and Ordinarily Resident taxpayers, the income tax return requires specified foreign assets to be disclosed in Schedule FA, irrespective of whether those assets generated income during the year. Puri notes that the law requires disclosure, not because tax is payable, and this distinction catches even otherwise compliant taxpayers by surprise. Common explanations include "I forgot the account existed," "There was no income," or "I did not know it had to be disclosed." The Black Money law contains stringent consequences for undisclosed foreign income and assets, making foreign disclosures far more serious than domestic compliance issues.
