Govt opens one-time foreign assets' disclosure window starting Aug 16

Eligible taxpayers can disclose specified foreign income and assets under the one-time scheme till December 31, with a 60 per cent outgo in one category and a ₹1 lakh fee in another

The government will open a one-time window starting August 16, 2026, for small taxpayers to disclose certain undisclosed foreign assets and foreign income, a scheme announced in the Union Budget 2026-27.

 

The Central Board of Direct Taxes (CBDT) has operationalised the Foreign Assets of Small Taxpayers–Disclosure Scheme, 2026, notified under Chapter IV of the Finance Act, 2026. The disclosure window will remain open till December 31, 2026.

 

What are the two categories under the disclosure scheme?

 

The first category covers those declaring assets or income of up to Rs 1 crore, who will be required to pay tax of 30 per cent along with an additional levy equal to the tax, taking the total outgo to 60 per cent. The tax and the additional levy will apply to both the asset's value as well as the income accrued from it.

 

 

A separate category covers foreign assets worth up to ₹5 crore that had already been acquired from income offered to tax or were acquired when the taxpayer was a non-resident but were not disclosed in the relevant return. A flat fee of ₹1 lakh will apply to such declarations. Assets beyond ₹5 crore will not qualify under this category, according to FAQs issued by the CBDT.

 

The scheme covers any undisclosed asset located outside India, including a financial interest in a foreign entity, or undisclosed foreign income that was chargeable to tax in India but was not disclosed for that purpose. For the first category, the aggregate value of the undisclosed foreign asset and foreign income must not exceed ₹1 crore.

 

For the first category, the aggregate value of the undisclosed foreign asset and foreign income must not exceed ₹1 crore.

 

For example, the CBDT said that if an undisclosed foreign bank account is valued at ₹60 lakh and undisclosed foreign income is ₹20 lakh, the total amount payable would be ₹48 lakh. This comprises tax of ₹24 lakh and an additional amount equal to the tax.

 

For the second category, the aggregate value of assets located outside India must not exceed ₹5 crore. The taxpayer is required to pay a flat fee of ₹1 lakh.

 

How will foreign assets be valued?

 

The valuation date for assets covered by the scheme is March 31, 2026. As a general rule, fair market value is the higher of the cost of acquisition and the price the asset would ordinarily fetch in the open market on that date. Specific valuation methods have been prescribed for assets including foreign bank accounts, jewellery, property, and listed and unlisted securities.

 

For foreign bank accounts, the value is generally based on the sum of deposits made into the account from the date it was opened up to the valuation date, subject to specified exclusions. The FAQs also provide rules to prevent the same funds from being counted twice where withdrawals are subsequently redeposited or used to acquire another asset.

 

How can taxpayers make a declaration?

 

The declaration has to be filed electronically in Form 1. The entire process will be handled online by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as applicable.

 

The scheme is available to residents as well as certain non-residents and 'resident but not ordinarily resident' (RNOR) taxpayers, subject to conditions. A person who is currently a non-resident can also make a declaration if the person was resident in India in the year to which the undisclosed income relates or in the year in which the undisclosed asset was acquired.

 

A declaration can be made where the taxpayer has failed to furnish a return, failed to disclose the foreign asset or income in a return filed before the scheme commenced, or where the asset or income has escaped assessment.

 

What are the payment deadlines?

 

After electronic verification of Form 1, the income-tax department will communicate the amount payable through an order in Form 2 within one month from the end of the month in which the declaration was made. The amount has to be paid within two months from the end of the month in which the order is received.

 

Taxpayers unable to make the payment within this period will get a further period of up to two months, subject to simple interest at 1 per cent for every month or part of a month of delay. If payment is not made within the outer limit, the benefit of the scheme ceases to be available for that declaration.

 

What immunity does the scheme provide?

 

A valid declaration followed by payment provides immunity from further tax or penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in respect of the income or asset declared. The declared income or amount of investment in the declared asset will also not be included in the taxpayer’s total income under the Income-tax Act, 1961 or the Black Money Act.

 

The scheme, however, is not available for income or assets that represent, directly or indirectly, proceeds of crime in respect of which proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002. It is also unavailable where assessment proceedings under the Black Money Act for the relevant assessment year have already been completed.

 

The CBDT FAQs also clarify that a declaration cannot be used to claim rectification, revision, set-off or other relief in respect of income or assets already assessed or amounts paid under the scheme.