Foreign Assets of Small Taxpayers
Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026
A limited-period opportunity for eligible individual taxpayers to disclose previously unreported foreign assets and income.
Scope and applicability
Open to individual taxpayers who were resident and ordinarily resident in India in the tax year relevant to the foreign income or asset. An undisclosed foreign asset is an asset or financial interest outside India held directly or as beneficial owner, including where the source of investment cannot be satisfactorily explained. Undisclosed foreign income is income arising outside India that was taxable in India but not offered to tax.
Categories of declaration and applicable payments
Undisclosed foreign assets or income
Income that accrued while the tax payer was a resident and was not disclosed, or an asset acquired from income already taxed in India but never reported. Aggregate value must not exceed INR 5 crore.
Asset acquired while non-resident
A foreign asset acquired from income earned outside India while the taxpayer was a non-resident, with an aggregate value not exceeding INR 1 crore.
Key valuation rules
- Fair market value = higher of acquisition cost and open-market realisable amount
- Valuation date: 31 March 2026
- Separate methods for bullion and jewellery, shares and securities, immovable property, works of art, bank accounts and partnership interests
- A valuer report recognised in the asset's country may support value; otherwise indexed cost applies
- Foreign currency converted to INR per prescribed rules
Filing process and timelines
- Declaration filed in Form 1 with the designated authority
- Form 2 intimation of the amount payable, issued within one month of the end of the month of filing
- Payment made within the time prescribed in the intimation
- Form 4 final confirmation issued after proof of payment
- All declarations must fall within the scheme window
Important considerations
- Multiple assets may be disclosed in one consolidated Form 1
- A variation of up to 20% in asset value may be accepted, subject to conditions
- Complete payment within the prescribed timeline
- Maintain documentation and supporting evidence
- Not available for proceeds of crime
- Not available where assessments, reassessments or prosecutions under the Black Money Act, 2015 are already completed
- Only resident and ordinarily resident individuals are eligible
A valid declaration with the prescribed payment provides protection against additional tax, penalty and prosecution under the Black Money Act, 2015, subject to fulfilment of the applicable conditions.