Announced by Finance Minister Nirmala Sitharaman in the February 1 Budget, the one-time scheme is aimed at bringing certain previously undisclosed foreign assets and income into the tax net, particularly benefiting small taxpayers including students and non-resident Indians.
Under the scheme, taxpayers with undisclosed foreign income of up to Rs 1 crore can make a declaration until December 31, 2026. They will be required to pay tax at 30% of the undisclosed income, along with an equal amount as penalty.
The scheme also covers taxpayers who acquired foreign assets worth up to Rs 5 crore using income on which tax had already been paid but failed to report those assets in their income tax returns.
Such taxpayers can disclose the assets by paying a one-time amount of Rs 1 lakh, according to the government.
The market value of the foreign assets covered under the scheme will be determined as of March 31, 2026.
The government has positioned the measure as a compliance-focused relief for taxpayers with relatively small foreign holdings or income, while providing them an opportunity to regularise past non-disclosures without facing the full consequences that may otherwise apply under existing tax laws.The scheme is available only for the specified categories of foreign assets and income and is subject to the conditions laid down by the government.
(With inputs from Reuters)