India has launched a one-time compliance window allowing small taxpayers to disclose undisclosed foreign assets with reduced penalties, aiming to regularise past omissions and bolster international data-sharing efforts.
India has opened a one-time compliance window for taxpayers with undisclosed foreign assets and income, in a move aimed at helping smaller holders of overseas investments regularise past omissions without facing the full force of black money penalties. The Foreign Assets of Small Taxpayers-Disclosure Scheme, 2026, came into effect on August 16 and will remain open until December 31, 2026, according to the government’s announcement and reporting by Reuters-style financial outlets.
The scheme appears designed for people whose overseas holdings were small, old or inadvertently left out of tax filings. That includes Indian professionals with foreign employee stock options or shares, people who once worked or studied abroad, returning non-residents and taxpayers who still hold dormant foreign bank accounts or similar assets. Goodreturns and other business publications said the policy also reflects the authorities’ broader effort to improve compliance using information from international data-sharing systems.
Two disclosure routes are available. Under one, taxpayers can declare undisclosed foreign assets or foreign income with an aggregate value of up to ₹1 crore, but the cost is steep: 30% tax plus a further 30% penalty, for an effective 60% outlay. The valuation is tied to prescribed rules, with March 31, 2026, used as a key reference date. A separate route covers foreign assets worth up to ₹5 crore where the assets were originally acquired from already-taxed income, or during a period when the person was non-resident, but were not properly reported later. In those cases, eligible taxpayers can settle the matter by paying a flat ₹1 lakh fee.
Declarations must be filed electronically in the prescribed form through the income-tax system, after which officials will review the submission and determine the amount payable under the relevant category. Once payment is made, the taxpayer is issued certification under the scheme. The main attraction is legal cover: valid declarations can secure immunity from further tax demands, penalties and prosecution under the Black Money Act for the matters covered.
The window is not universal, however. Cases involving proceeds of crime and matters where proceedings have already been completed are excluded, meaning taxpayers will need to establish ownership, source and valuation carefully before filing. Moneycontrol and Mint also reported that Budget 2026 measures included a separate, narrower relief for very small foreign holdings, under which certain non-disclosures below ₹20 lakh would not trigger prosecution, underscoring the government’s dual approach of leniency for minor lapses and tougher scrutiny for larger overseas assets.
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