An SMS about foreign assets is usually a compliance nudge built from FATCA data, and it doesn't mean you owe anything. A notice under Section 133(6) or 142(1) on the e-filing portal is different: it carries a real deadline and a required response. The two look alike, and they get handled differently.
Work out what kind of foreign assets notice you actually got
Start here before you do anything else, because the two tracks don't overlap. The Income Tax Department has sent a compliance-cum-awareness message since November 2024, under a program it calls the NUDGE campaign.
The NUDGE-style message
These messages arrive as a plain SMS or email. They ask you to review Schedule FA and Schedule FSI for a named assessment year. They carry no case number, and they won't show up in your e-filing portal's pending-actions list at all.
A formal notice
A formal notice is a different animal. It's issued under a specific section, most often Section 133(6) (a request for information) or Section 142(1) (a call to file or explain before assessment). Section 148, a reassessment of income that escaped assessment, is rarer and comes with its own case record.
The Income-tax Act, 2025 renumbered all three of these from tax year 2026-27 onward. Check the number printed on your own notice rather than assuming the old one still applies.
A formal notice lands in your e-filing account with a document identification number and a stated deadline. I'd treat the SMS-only version as a prompt to check your own filing, not as proof the department found something. The formal notice is the one you can't sit on.
Why a genuine NRI can get flagged at all
This is the part that catches people out. The department built the NUDGE program from Automatic Exchange of Information (AEOI) records. For US accounts specifically, that data reaches India through the FATCA agreement between the two countries, not the separate CRS network the US never joined.
That data shows a foreign account tied to your PAN. It doesn't, on its own, show your residential status for that year, and that gap is exactly where a compliant NRI ends up flagged.
This matters because Schedule FA disclosure is mandatory only for a Resident and Ordinarily Resident, or ROR. A Non-Resident Indian (NRI) or a Resident but Not Ordinarily Resident (RNOR) generally has no Schedule FA obligation, no matter the account size.
If you're an NRI or RNOR
If you're a US-based NRI who spends most of the year outside India, a system built to catch resident under-disclosure can still text you. It's matching account data to a PAN, not to your day count in India that year.
Confirm your residential status against the day-count rules for the year the message names. If the math holds you outside ROR territory, your foreign accounts sit outside Schedule FA's reach.
Case in point. Priya, a software engineer on an H-1B visa in California, got exactly this SMS last year over a Fidelity account FATCA had reported. She'd spent eleven months in the US and had already filed as an NRI. She closed the loop with a one-line portal reply. No revised return, no further contact.
If you're ROR
If your day count actually puts you at ROR for that year, the calculus changes. Foreign assets NRIs must disclose after returning from the US covers what counts: foreign bank and brokerage accounts, retirement accounts like a 401(k) or IRA, and foreign equity or debt holdings.
All of it belongs in Schedule FA once you're ROR. The account balance never exempts you from that.
What to do if the assets should have been disclosed
Don't wait for a formal notice to fix a genuine gap. Gather your account statements for the assessment year and work out the correct foreign asset entries. File a revised return if the window for that assessment year is still open.
How to declare RSU shares in Schedule FA walks through the mechanics of the schedule itself, including the fields that trip up first-time ROR filers.
Take the exposure seriously here. Under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015, failing to disclose a foreign asset as an ROR isn't an ordinary late-filing default. Penalties can reach Rs 10 lakh per undisclosed asset, with prosecution risk attached.
The number that matters. A missed Schedule FA entry for an ROR isn't a late-filing fee. It's exposure of up to Rs 10 lakh per undisclosed foreign asset under the Black Money Act, plus prosecution risk.
That's separate from any FBAR or FATCA exposure you're already carrying on the US side. A missed Schedule FA entry is worth fixing before anyone asks, not after.
How to respond to a formal notice under Section 133(6) or 142(1)
Read the notice for exactly what it asks, not what you assume it asks. These notices usually request specific documents: account statements, source-of-funds evidence, or a residency clarification. They name their own response window rather than following a fixed statutory number of days.
Respond only through the e-Proceedings section of the income tax portal, since that's where the department expects and logs your reply. A few things make this go smoothly:
- Answer only what the notice actually requests, without volunteering unrelated detail.
- Attach account statements and residency proof as PDFs, not screenshots.
- Keep a copy of everything you submit and the date you submitted it.
- Bring in a practitioner once the notice references Section 148 or more than one year.
Two mistakes that make a routine query worse
The most common misstep isn't ignoring the message. It's answering before checking residency status, which is how a compliant NRI ends up filing a defensive revised return that creates a paper trail where none was needed. Work out your ROR status first, every time.
The second mistake is treating a plain SMS as equivalent to a portal notice and leaving no written response at all. Even a non-statutory nudge is worth a short reply through the portal.
That reply confirms your status and gives you a dated record if the same PAN gets flagged again next cycle.
Check your residential status for the year named in the message before anything else. That single fact decides whether you have a five-minute portal reply ahead of you or a real Schedule FA correction.
If your situation involves more than one assessment year, or a formal notice citing Section 148, get a practitioner to look at the actual notice before you respond. Ten minutes confirming residency status beats filing a defensive revision that raises questions nobody asked, and I'd take that trade every time.
Frequently asked questions
Do NRIs have to disclose foreign assets in their Indian tax return?
No, not while you hold NRI or RNOR status. The Schedule FA disclosure requirement switches on only when you become a Resident and Ordinarily Resident, regardless of how much you hold abroad.
Can I ignore an income tax notice about foreign assets?
You can ignore a plain SMS or email nudge, though a short portal reply is worth the ten minutes. You can't ignore a formal notice under Section 133(6) or 142(1): the department can proceed to an ex parte assessment if you miss its stated deadline.
Is there a minimum foreign account balance before Schedule FA applies?
No. Once you're ROR, every foreign bank account, brokerage account, and retirement account gets disclosed regardless of size. The RNOR window is what gives you a size-independent exemption, not a balance threshold.
What is the penalty for not disclosing a foreign asset under the Black Money Act?
The Black Money (Undisclosed Foreign Income and Assets) Act, 2015 allows penalties of up to Rs 10 lakh per undisclosed foreign asset for an ROR who fails to report it, along with prosecution risk in serious cases.
Does a foreign assets SMS mean the department found unreported income?
Not by itself. The message comes from FATCA data matched against your AIS record, and a matched account says nothing about whether you owed to disclose it that year. Confirm your residential status before assuming anything is wrong.