The Central Board of Direct Taxes (CBDT) has notified the Overseas Belongings of Small Taxpayers-Disclosure Scheme Guidelines, 2026, giving small taxpayers a window to declare undisclosed international belongings and revenue, with reduction starting from full immunity to a 100% penalty relying on the worth and nature of the disclosure. The principles come into drive on 16 August.
Who qualifies
The scheme covers 4 classes of international holdings: undisclosed belongings situated outdoors India, undisclosed international revenue, belongings acquired overseas throughout a interval of non-residency however not declared on turning into resident, and belongings purchased from already-taxed revenue however neglected of the related schedule within the revenue tax return.
Eligibility is capped at two thresholds. Declarations combining undisclosed international revenue and undisclosed belongings can not exceed Rs 1 crore in combination truthful market worth. A separate class, masking belongings acquired throughout non-residency or from disclosed revenue however not reported, is capped at Rs 5 crore. Taxpayers exceeding both threshold are ineligible to declare beneath the scheme.
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The price of disclosure
For the Rs 1 crore bracket, declarants should pay 30% tax on the worth of undisclosed belongings and revenue, plus a 100% penalty on that tax, taking the efficient payout to 60% of the combination worth. For the Rs 5 crore bracket, the scheme levies solely a flat price, nil for smaller declarations or Rs 1 lakh, with no tax or penalty part.
Declarants who full cost inside the prescribed timeline get immunity from additional tax, penalty and prosecution beneath the Black Cash (Undisclosed Overseas Earnings and Belongings) and Imposition of Tax Act, 2015, as soon as the declaration is licensed as legitimate.
Valuation and deadlines
Truthful market worth is to be computed as on the valuation date of 31 March 2026, primarily based on guidelines masking bullion, jewelry, art work, quoted and unquoted shares, immovable property and financial institution accounts. For financial institution accounts, worth is predicated on the sum of all deposits because the account was opened, or since a previous Black Cash Act declaration if one was made. Overseas foreign money values are to be transformed to rupees utilizing the RBI’s reference fee on the valuation date.
Declarations should be filed electronically in Type 1 by 31 December 2026, the final date mounted beneath the principles. As soon as the revenue tax authority, the Principal Director Normal or Director Normal of Earnings-tax (Programs), passes an order figuring out the payable quantity in Type 2, the declarant will get two months to pay with out curiosity. An additional two-month window is offered with curiosity at 1% per thirty days on the excellent quantity, after which the scheme’s profit lapses and the declaration is handled as void.
Tolerance for valuation gaps
The principles additionally construct in a buffer for real valuation disputes. If the truthful market worth declared in Type 1 differs from what an assessing officer determines throughout evaluation or inquiry, the declaration won’t be handled as invalid solely on that floor, offered the variance doesn’t exceed 20% of the declared worth.
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