Big relief to taxpayers with undisclosed foreign assets: CBDT notifies Foreign Assets of Small Taxpayers disclosure scheme rules; Know who can use it by December 31, 2026

The Central Board of Direct Taxes (CBDT) notified the Foreign Assets of Small Taxpayers—Disclosure Scheme Rules, 2026 via a notification (No. 114/2026) and this will come into effect from August 16, 2026.

For those who don’t know, the Foreign Assets of Small Taxpayers—Disclosure Scheme is a one-time voluntary disclosure scheme contained in Chapter IV (sections 130 to 144) of the Finance Act, 2026. It enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee.

So this voluntary declaration which you can make under the Foreign Assets of Small Taxpayers—Disclosure Scheme needs to happen by December 31, 2026 as no declaration can be filed after this date. The entire process will be done online.


Also for the purpose of valuation of these undisclosed foreign assets, you need to consider the valuation date is March 31, 2026. This means whatever is the fair market value of assets which are proposed to be declared by you must be the value as of March 31, 2026.

Here are some FAQs to help you understand:

Who can use it by December 31, 2026

The eligible category of “assessee” who can use this scheme is:
(i) who is resident in India, (as per section 6 of the Income-tax Act, 1961), in the relevant previous year; or
(ii) who is a non-resident, or resident but not ordinarily resident (RNOR), [as per section 6(6) of the Income-tax Act, 1961], in the relevant previous year, but was resident in India either-
(A) in the previous year to which the undisclosed foreign income under section 4 of the Black Money Act, 2015 relates, or
(B) in the previous year in which the undisclosed asset located outside India was acquired.

Moreover, a person who is a non-resident but was resident in India either (i) in the year to which the undisclosed income relates; or (ii) in the year in which the undisclosed asset was acquired can make a declaration under this scheme.

What is the amount payable for a declaration under Section 133 – (Table: Sl. No. 1)?

The total amount payable would be the aggregate of - (i) tax of 30% of the value of the undisclosed asset located outside India or 30% of the undisclosed foreign income declared; and (ii) amount equal to the tax paid in (i)

For example: Where an undisclosed foreign bank account is valued at Rs 60 lakh and undisclosed foreign income is Rs 20 lakh, the aggregate payable is Rs 48 Lakh as given below:

What is the amount payable for a declaration under Section 133 – (Table: Sl. No. 2)?

A flat fee of Rs 1 lakh, provided the aggregate value of the assets located outside India does not exceed Rs 5 crore.

What is the amount payable if the aggregate value of the assets located outside India is Rs 6.5 crore?

If the value of the assets is more than Rs 5 Cr, the assessee will not be eligible to avail the scheme.

What is the general approach for computing fair market value (FMV)?

As a general rule, FMV is the higher of (a) the cost of acquisition, and (b) the price the asset would ordinarily fetch if sold in the open market on the valuation date, ideally supported by a report from a valuer recognised by the government (or its agency) of the country where the asset is located. Where such market valuation is not carried out, the indexed cost of acquisition is deemed to be the fair market value.

How is FMV computed for bullion, jewellery or precious stones?

FMV is the higher of the cost of acquisition and its open-market price on the valuation date (supported by a recognised valuer’s report); if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

How is FMV computed for archaeological collections, paintings, sculptures or other artistic works?

FMV is the higher of the cost of acquisition and its open-market price on the valuation date (supported by a recognised valuer’s report); if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

How is FMV computed for quoted shares and securities?

FMV is the higher of the cost of acquisition and the average of the lowest and highest price quoted on an established securities market on the valuation date;

In case there is no trading of quoted shares and securities on the valuation date, how is the FMV calculated?
In case of no trading on valuation date, the FMV is the average of the lowest and highest price on the nearest preceding date on which the shares/securities were traded.

How is FMV computed for unquoted equity shares?

FMV is the higher of the cost of acquisition and the value computed by a prescribed formula based on the book value of specified assets, the fair market value of bullion, jewellery, shares, securities and immovable property, liabilities (excluding specified items such as paid-up capital and reserves), and the paid-up value of the equity shares. If this valuation is not carried out, the indexed cost of acquisition is deemed to be the FMV.

How is FMV computed for unquoted shares/securities other than equity shares?

FMV is the higher of cost of acquisition and the open-market price (the price that the share or securities would ordinarily fetch if sold on the open market) on the valuation date, supported by a recognised valuer’s report; if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

How is FMV computed for immovable property located outside India?

FMV is the higher of the cost of acquisition and the open-market price on the valuation date, as per a valuation report from a valuer recognised by the government (or its agency) of the country where the property is located; if such valuation is not carried out, the indexed cost of acquisition shall be the FMV.

Is RNOR (Resident but Not Ordinarily Resident) status relevant?

Yes. The definition of “assessee” specifically covers non-resident and RNOR persons who meet the residency conditions noted above. The declarant can state his residential status for the previous year of acquisition of the asset or earning of the income in Form 1.

On what grounds can a declaration be made?

A declaration may be made where the assessee — (a) has failed to furnish a return under section 139 of the Income-tax Act, 1961; or (b) has failed to disclose the asset or income in a return furnished before the Scheme commenced; or (c) such asset or income has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961.

Within what time-window must the declaration be filed?

On or after the date of commencement of the Scheme, but on or before the last date (i.e., between August 16, 2026 and December 31, 2026).

Can a declaration be made for any previous year?

Yes, a declaration can be made for any previous year in respect of income or assets covered by the Table in section 133, subject to the monetary thresholds and other conditions of the Scheme.