India’s Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 is now in force after the Scheme Rules were notified on August 14, 2026 and the scheme took effect on August 16, 2026. Eligible taxpayers have until December 31, 2026 to file electronically in Form 1 and regularize undisclosed foreign assets or foreign income under the one-time window.
- For combined undisclosed foreign assets and foreign income up to ₹1 crore, the payable amount is 30% tax plus an equal amount, for an effective total of 60%.
- For specified foreign assets up to ₹5 crore that were acquired while non-resident or from already taxed income but not reported, the scheme charges a flat ₹1 lakh fee.
- The valuation date is March 31, 2026, and after filing, the department issues its order; taxpayers generally have two months to pay, with an additional two-month extension available with interest in some cases.
- The scheme provides immunity from further tax, penalty, and prosecution under the Black Money Act, 2015 for the declared income or asset.
- India opens a six-month disclosure window for taxpayers to report omitted foreign assets and income until December thirty-first, 2026.
- Undisclosed assets under one crore rupees incur a sixty percent total tax and penalty charge for regular compliance.
- Specified assets under five crore rupees require a flat fee of one lakh rupees for certain reporting failures.
India has opened a six-month window for eligible taxpayers to disclose certain foreign assets and overseas income omitted from earlier Indian tax filings. The scheme takes effect on August 16, 2026, and declarations must be filed by December 31, 2026.
The measure is aimed at residents, returning residents and other eligible taxpayers whose overseas holdings were not reported correctly. It particularly affects NRIs who acquired bank accounts, investments or property abroad before moving back to India.
Free toolSubstantial Presence Test Calculator
The government announced the measure in the Union Budget 2026-27. It creates two compliance routes, with sharply different costs depending on why the asset went undisclosed and how much it was worth.
The window is voluntary and one-time. It is not a blanket amnesty.
The income-tax department’s FAQ says the scheme operates under Chapter IV, sections 130 to 144, of the Finance Act, 2026. It covers taxpayers who failed to disclose eligible foreign assets or income in an earlier return, did not file a return, or had foreign income escape assessment, subject to the scheme’s conditions.
The 60% route applies to undisclosed assets and income up to ₹1 crore
The first category covers undisclosed foreign assets and undisclosed foreign income with an aggregate value of no more than ₹1 crore. The valuation date for that cap is March 31, 2026.
Taxpayers using this route pay 30% tax on the disclosed amount and an additional amount equal to that tax. Together, the two charges produce an effective payment of 60%.
The additional 30% takes the place of the penalty that would otherwise apply under this route. A taxpayer disclosing ₹1 crore of qualifying assets or income would therefore face the 60% formula, subject to the prescribed rules and calculations.
The category is designed for assets or income that genuinely remained outside the Indian tax record. It can cover a foreign account, overseas income, securities or property, depending on the scheme’s eligibility conditions.
A ₹1 lakh fee covers a separate class of assets up to ₹5 crore
The second category deals with a different reporting failure. It applies to specified foreign assets acquired when a person was non-resident, or acquired from income that had already been taxed in India, but later omitted from the required foreign-asset schedule after the person became resident.
The aggregate value of those assets cannot exceed ₹5 crore. Eligible taxpayers pay a flat ₹1 lakh fee, rather than the 60% charge applied under the first category.
That distinction will matter to people who built assets abroad lawfully before returning to India. An overseas professional may have acquired shares while living outside India. A returning student may still hold a foreign bank account opened during study. The relevant question is not simply whether an asset was omitted, but which route fits its origin and tax history.
| Route | Assets or income covered | Maximum value | Amount payable |
|---|---|---|---|
| Category 1 | Undisclosed foreign assets or foreign income | ₹1 crore | 30% tax plus an equal additional amount, or 60% overall |
| Category 2 | Certain assets acquired while non-resident or from already-taxed income | ₹5 crore | ₹1 lakh fee |
Eligibility depends on residence, acquisition and the original omission
The rules cover people who were resident in India during the relevant year. They can also cover non-residents or resident but not ordinarily resident taxpayers if they were resident in India in the year the undisclosed foreign income arose or in the year the foreign asset was acquired.
That residence test works alongside the reason for the omission. The scheme is relevant where a person failed to report an eligible asset or income, failed to submit a return, or left foreign income outside an assessment.
Returning residents are among the clearest potential users. The group can include Indians coming back from the United States, Canada, the UK, Australia or Gulf countries, former F-1 students, and H-1B or other overseas professionals relocating to India.
The assets may include foreign bank accounts, overseas immovable property, quoted and unquoted shares, securities, jewellery, precious stones, bullion, artwork and other specified foreign assets. Undisclosed foreign income also falls within the scheme’s stated scope.
The scheme does not treat every overseas holding in the same way. Category 2 is limited to the specified assets and circumstances set out in the rules. Category 1 addresses the separate pool of undisclosed assets and income capped at ₹1 crore.
Valuation uses the March 31, 2026 reference date
The CBDT Rules set methods for calculating fair market value across asset classes. Quoted securities use stock-exchange prices, while foreign immovable property relies on prevailing market value supported by documentation.
Jewellery and bullion use prevailing market rates. Artwork requires valuation by qualified valuers.
The broad valuation framework uses March 31, 2026 as the valuation date. Taxpayers therefore need records that support both the asset’s value and the circumstances in which it was acquired.
That documentation may also help establish whether an asset belongs in the ₹1 lakh category or the 60% category. The scheme’s cost depends on that classification.
Filing takes place online through Form 1
The process is electronic from declaration through completion. The principal steps are:
- Submit Form 1 with the required details of the foreign asset, foreign income or qualifying omission.
- Receive an electronic order from the income-tax authority.
- Make the required payment within the prescribed period after receiving the order.
- Obtain the department’s certificate after payment is confirmed.
The FAQ identifies the income-tax authority as the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as applicable.
The filing deadline is fixed. A declaration cannot be made through this window after December 31, 2026.
A valid declaration can bring statutory relief
When a declaration satisfies all prescribed conditions and the required payment is completed, the taxpayer receives immunity from specified penalties and prosecution under the Black Money law for the disclosed amount.
For a valid declaration, the disclosed income or investment amount is not included in total income under the Income-tax Act or the Black Money Act. The protection applies only within the scheme’s conditions and exclusions.
The declaration can also affect pending assessment proceedings. An Assessing Officer must consider a valid declaration while completing those proceedings.
The relief does not remove the need to meet the scheme’s requirements. A taxpayer must use the correct route, remain within the applicable value cap and complete payment and certification.
Foreign-information reporting has raised the pressure to correct omissions
The disclosure window follows changes that allow taxpayers to view foreign financial information in their Annual Information Statements. Indian tax authorities receive such information through international exchange arrangements, including the Common Reporting Standard and FATCA.
Foreign account information can therefore appear in the AIS even when a taxpayer’s earlier foreign-asset disclosure was incomplete. Taxpayers with overseas financial ties are being given a defined period to compare that information with their returns and schedules.
The window opened on August 16, 2026. The last filing date is December 31, 2026, and the department requires online filing through the prescribed forms.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
