No Legal Definition Of HNIs Under Income Tax Law: Government

The government has clarified that there is no specific legal definition of High Net Worth Individuals (HNIs) under the Income-tax Act, 1961, with taxation of individuals based on income slabs regardless of the source of income.

Minister of State for Finance Pankaj Chaudhary said income tax provisions apply uniformly to all individuals, whether income is derived from salary, business or profession.

To enhance transparency in asset declarations, the government has mandated disclosure of movable and immovable assets in income tax returns for individuals with income above Rs 50 lakh, a threshold increased to Rs 1 crore from assessment year 2025–26.

Further, resident taxpayers are required to report foreign assets and income under relevant schedules, with non-compliance attracting penalties under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The government has also entered into tax treaties with multiple countries to facilitate exchange of financial information for effective enforcement of tax laws.

On enforcement, the Central Board of Direct Taxes (CBDT) and the Directorate of Enforcement (ED) maintain close coordination through structured information-sharing mechanisms to strengthen financial investigations.

Globally, India participates in information exchange frameworks and engages bilaterally as well as through multilateral platforms such as the Global Forum on Transparency and Exchange of Information for Tax Purposes to address issues and improve compliance.

The government is increasingly leveraging data analytics tools, including the Non-Filer Monitoring System and Project Insight, to detect tax evasion and verify disclosures related to income and assets.

As part of this effort, the Income Tax Department launched the NUDGE (Non-Intrusive Usage of Data to Guide and Enable) campaign in November 2024 and November 2025 to encourage voluntary compliance.

During the 2024 campaign, over 19,500 taxpayers were alerted for non-disclosure of foreign assets, with more than 12,000 responding and filing revised returns. Around 30,000 taxpayers reported foreign assets worth Rs 29,208 crore and foreign income of Rs 1,089.88 crore.

In the 2025 campaign, over 20,400 taxpayers were nudged, with more than 13,000 filing revised returns. A total of 1.57 lakh taxpayers disclosed foreign assets worth Rs 99,882 crore and foreign income of Rs 6,540 crore.

India, as a member of the G20, continues to play an active role in global efforts on tax transparency and information exchange. In 2026, India assumed the presidency of the Asset Recovery Interagency Network Asia Pacific (ARIN-AP), which focuses on tracing and recovering proceeds of crime across the region.

The government said these measures aim to improve compliance, enhance transparency and strengthen the overall tax administration framework.

Source from: https://knnindia.co.in/news/newsdetails/sectors/no-legal-definition-of-hnis-under-income-tax-law-government