The government has opened a one-time window for small taxpayers to come clean on undisclosed foreign income and assets. The Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 (Notification No. 114/2026 dated 14 August 2026, made under Chapter IV of the Finance Act, 2026) came into force on 16 August 2026.
Key dates
- Valuation date: 31 March 2026
- Last date to declare: 31 December 2026
Who can declare: the limits
| Declaration under section 133 | Limit |
|---|---|
| Table Sl. No. 1: undisclosed income and assets outside India | Total of ₹1 crore or less |
| Table Sl. No. 2: undisclosed assets outside India | Total of ₹5 crore or less |
Cases above these limits can't use the scheme.
How assets are valued
The rules set out how to work out fair market value on the valuation date. For example:
- Bullion, jewellery, precious stones, art: the higher of cost and open-market value (backed by a recognised foreign valuer's report), or the indexed cost if no valuation is done.
- Quoted shares and securities: the higher of cost and the market price on the valuation date.
- Foreign bank accounts: broadly, the sum of deposits made (with redeposits of withdrawn money not counted twice), converted to rupees on 31 March 2026.
A difference of up to 20% between your declared value and a later valuation by the tax authority won't make the declaration void for misrepresentation.
The four forms
- Form 1: your declaration, filed electronically.
- Form 2: the order setting out the amount payable.
- Form 3: your intimation of payment, with proof.
- Form 4: the order certifying that the declaration and payment are valid.
Paying
- Pay within two months from the end of the month you receive the Form 2 order, with no interest.
- You get up to two more months, with interest of 1% per month or part of a month on the unpaid amount.
- You can pay in parts.
- If you don't pay in time, the declaration is void, as if it had never been made.
What to do
If you hold foreign assets or income you never reported, talk to a tax adviser well before 31 December 2026 to check eligibility, value the assets and calculate the amount payable under the Finance Act, 2026.
