Blitz Bureau
NEW DELHI: The Central Board of Direct Taxes (CBDT) has notified the ‘Foreign Assets of Small Taxpayers-Disclosure Scheme Rules, 2026’ for a one‑time disclosure window, allowing small taxpayers to declare undisclosed foreign assets and income.
The rule offers immunity from prosecution and different relief depending on the value and nature of the disclosure.
The ‘Foreign Assets of Small Taxpayers‑Disclosure Scheme Rules, 2026’ will come into force on August 16 and set out four categories of foreign holdings that can be declared, according to an official statement.
They include undisclosed assets located outside India; undisclosed foreign income; assets acquired abroad during a period of non‑residence but not declared on becoming resident; and assets bought from already‑taxed income but omitted from the relevant return schedule in the income tax return.
Declarations must be filed electronically in Form 1 by December 31, 2026, and after the Principal Director General or Director General of Income-tax (Systems), passes an order determining the payable amount in Form 2, the declarant can pay the amount within two months without interest.
An additional two-month window is available with interest at 1 per cent per month on the outstanding amount, after which the scheme’s benefit lapses and the declaration is treated as void.
Eligibility for availing the scheme is capped at two thresholds. Declarations combining undisclosed foreign income and undisclosed assets cannot exceed Rs 1 crore in aggregate fair market value. A separate category covering assets acquired during non‑residence or from disclosed income but not reported is capped at Rs 5 crore.
