Foreign Assets of Small Taxpayers Disclosure Scheme 2026: Declare by 31 December 2026

The CBDT has notified the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 (Notification G.S.R. 732(E), 14 August 2026), in force from 16 August 2026. The scheme, under Chapter IV of the Finance Act, 2026, lets eligible taxpayers declare undisclosed foreign assets and income.

Two categories

The illustrations in the rules show how each category works:

• Serial number 1: an undisclosed foreign bank account worth ₹60 lakh on 31 March 2026, plus ₹20 lakh of undisclosed foreign income from earlier years. The total, ₹80 lakh, is within ₹1 crore. Tax is ₹18 lakh on the account and ₹6 lakh on the income, and the penalty is ₹24 lakh (100% of the tax), so ₹48 lakh is payable.
• Serial number 2: a plot of land abroad, bought in 2015 from income earned abroad while the person was a non-resident, and not disclosed in the relevant schedule of the return after the person became resident. Its value on the valuation date is ₹3 crore, within ₹5 crore, so a fee of ₹1 lakh is payable.
• Not covered: where the assets together are worth more than ₹5 crore (₹6.5 crore in the rules' example), the case falls outside the scheme.

How the process works

1. 1

   Declare in Form 1

   File the declaration electronically in Form 1 to the income-tax authority, by 31 December 2026.

2. 2

   Order in Form 2

   The authority issues an order in Form 2 stating the amount payable.

3. 3

   Pay and intimate in Form 3

   Pay electronically within two months from the end of the month in which the order is passed, without interest. After that, payment can still be made for up to two additional months, with interest at 1% per month or part of a month. Intimate the payment with proof in Form 3.

4. 4

   Order in Form 4

   The authority issues an order in Form 4 certifying the validity of the declaration.

If the amount is not paid within the time allowed, the declaration is treated as void.

Valuation

Assets are valued as on 31 March 2026 under the rules. For example, a foreign bank account is valued at the sum of all deposits made from the date the account was opened to the valuation date, and immovable property at the higher of its cost of acquisition and the price it would ordinarily fetch in the open market on the valuation date. Check the rules for the method that applies to each asset type.