🌍 Finance Bill 2026 — Chapter IV

Foreign Assets Disclosure Scheme 2026

The Finance Bill 2026 introduces a one-time amnesty scheme — the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 — allowing eligible taxpayers to voluntarily declare undisclosed foreign assets and income in exchange for immunity from penalty and prosecution.

👤 Who Can Declare — Eligibility (Sections 114–115)

The scheme targets “small taxpayers” — individuals, HUFs, and small companies who hold undisclosed foreign assets and income of limited value that were not reported in earlier returns:

• Individuals, HUFs, firms, and closely held companies resident in India
• Undisclosed foreign assets/income not exceeding a prescribed threshold (notified by Board)
• Declarant must not be under search, survey, or Black Money Act proceedings
• Assets must not be proceeds of crime or terror financing
• Declaration must relate to assets acquired before 31st March 2026

💰 Tax & Amount Payable (Section 117)

The amount payable under the scheme is computed as follows:

• Tax: 30% of the fair market value of undisclosed foreign assets/income
• Surcharge: 25% of the tax amount (i.e., 7.5% of asset value)
• Total effective rate: ~37.5% of declared asset value
• Amount paid is non-refundable under any circumstances (Section 122)
• No deduction, exemption, or set-off is allowed against declared income

📋 How to File Declaration (Sections 116–119)

• Declaration filed electronically to the Principal Commissioner of Income Tax
• Form and manner prescribed by CBDT via Rules
• Payment of tax + surcharge must be made before filing the declaration
• Declaration deemed invalid if payment is not made within 30 days of filing
• CBDT will issue confirmation of receipt — this acts as the final acknowledgment

🛡️ Immunity from Penalty & Prosecution (Section 123)

• Declared assets/income not included in total income — no further tax demand (Section 120)
• Declaration does not affect finality of previously completed assessments (Section 121)
• Full immunity from penalty under Black Money Act and FEMA for declared assets
• Full immunity from prosecution under IT Act and Black Money Act
• Immunity does NOT apply to money laundering, NDPS, or PMLA offences

🚫 Who Cannot Use This Scheme (Section 124)

• Cases where CBDT has issued notice under Black Money Act already
• Cases involving assets that are proceeds of crime under PMLA, NDPS, or COFEPOSA
• Taxpayers who have been charged with terrorism financing
• Public servants and government employees
• Cases where search and seizure operations have already commenced