The federal government will open a one-time window beginning August 16, 2026, for small taxpayers to reveal sure undisclosed international property and international revenue, a scheme introduced within the Union Finances 2026-27.
The Central Board of Direct Taxes (CBDT) has operationalised the International Belongings of Small Taxpayers–Disclosure Scheme, 2026, notified underneath Chapter IV of the Finance Act, 2026. The disclosure window will stay open until December 31, 2026.
What are the 2 classes underneath the disclosure scheme?
The primary class covers these declaring property or revenue of as much as Rs 1 crore, who shall be required to pay tax of 30 per cent together with an extra levy equal to the tax, taking the entire outgo to 60 per cent. The tax and the extra levy will apply to each the asset’s worth in addition to the revenue accrued from it.
A separate class covers international property price as much as ₹5 crore that had already been acquired from revenue provided to tax or have been acquired when the taxpayer was a non-resident however weren’t disclosed within the related return. A flat payment of ₹1 lakh will apply to such declarations. Belongings past ₹5 crore won’t qualify underneath this class, in line with FAQs issued by the CBDT.
The scheme covers any undisclosed asset positioned exterior India, together with a monetary curiosity in a international entity, or undisclosed international revenue that was chargeable to tax in India however was not disclosed for that function. For the primary class, the combination worth of the undisclosed international asset and international revenue should not exceed ₹1 crore.
For the primary class, the combination worth of the undisclosed international asset and international revenue should not exceed ₹1 crore.
For instance, the CBDT stated that if an undisclosed international checking account is valued at ₹60 lakh and undisclosed international revenue is ₹20 lakh, the entire quantity payable could be ₹48 lakh. This includes tax of ₹24 lakh and an extra quantity equal to the tax.
For the second class, the combination worth of property positioned exterior India should not exceed ₹5 crore. The taxpayer is required to pay a flat payment of ₹1 lakh.
How will international property be valued?
The valuation date for property lined by the scheme is March 31, 2026. As a common rule, truthful market worth is the upper of the price of acquisition and the value the asset would ordinarily fetch within the open market on that date. Particular valuation strategies have been prescribed for property together with international financial institution accounts, jewelry, property, and listed and unlisted securities.
For international financial institution accounts, the worth is usually primarily based on the sum of deposits made into the account from the date it was opened as much as the valuation date, topic to specified exclusions. The FAQs additionally present guidelines to stop the identical funds from being counted twice the place withdrawals are subsequently redeposited or used to amass one other asset.
How can taxpayers make a declaration?
The declaration must be filed electronically in Type 1. The complete course of shall be dealt with on-line by the Principal Director Normal of Earnings-tax (Methods) or the Director Normal of Earnings-tax (Methods), as relevant.
The scheme is accessible to residents in addition to sure non-residents and ‘resident however not ordinarily resident’ (RNOR) taxpayers, topic to situations. An individual who’s presently a non-resident can even make a declaration if the particular person was resident in India within the yr to which the undisclosed revenue relates or within the yr wherein the undisclosed asset was acquired.
A declaration could be made the place the taxpayer has didn’t furnish a return, didn’t disclose the international asset or revenue in a return filed earlier than the scheme commenced, or the place the asset or revenue has escaped evaluation.
What are the cost deadlines?
After digital verification of Type 1, the income-tax division will talk the quantity payable via an order in Type 2 inside one month from the tip of the month wherein the declaration was made. The quantity must be paid inside two months from the tip of the month wherein the order is acquired.
Taxpayers unable to make the cost inside this era will get an additional interval of as much as two months, topic to easy curiosity at 1 per cent for each month or a part of a month of delay. If cost is just not made inside the outer restrict, the advantage of the scheme ceases to be accessible for that declaration.
What immunity does the scheme present?
A legitimate declaration adopted by cost offers immunity from additional tax or penalty and prosecution underneath the Black Cash (Undisclosed International Earnings and Belongings) and Imposition of Tax Act, 2015, in respect of the revenue or asset declared. The declared revenue or quantity of funding within the declared asset may also not be included within the taxpayer’s whole revenue underneath the Earnings-tax Act, 1961 or the Black Cash Act.
The scheme, nonetheless, is just not accessible for revenue or property that symbolize, instantly or not directly, proceeds of crime in respect of which proceedings have been initiated or are pending underneath the Prevention of Cash-laundering Act, 2002. Additionally it is unavailable the place evaluation proceedings underneath the Black Cash Act for the related evaluation yr have already been accomplished.
The CBDT FAQs additionally make clear {that a} declaration can’t be used to say rectification, revision, set-off or different reduction in respect of revenue or property already assessed or quantities paid underneath the scheme.
