By Saurabh Garg, founder·6 min read·Published 2026-09-07

Short answer: CBDT notified the Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026 on 14 August 2026, in force from 16 August. A foreign asset bought out of income earned abroad while you were a non-resident, then left off your Indian return after you became resident, can be regularised for a fee of one lakh rupees where its value on 31 March 2026 is five crore rupees or less. The last date is 31 December 2026.

CBDT opens a foreign asset disclosure window, and returning NRIs sit inside it

CBDT notified the Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026 on 14 August 2026. A person who bought a foreign asset out of income earned abroad while a non-resident, then left that asset off the Indian return after becoming resident, can regularise it for a flat fee of ₹1 lakh where the value is ₹5 crore or less. The window closes on 31 December 2026.

What changed

The scheme was written into Chapter IV of the Finance Act, 2026, sections 130 to 144, and sat unusable until the rules and the forms arrived. Notification No. 114/2026, dated 14 August 2026 and published as G.S.R. 732(E), supplies both. The rules came into force on 16 August 2026. The valuation date for every declared foreign asset is 31 March 2026, and the last date to file is 31 December 2026.

Section 133 of the Finance Act, 2026 sets two routes.

Route one covers an undisclosed foreign asset or undisclosed foreign income, where the two together come to ₹1 crore or less. The price is tax at 30 per cent of the value, plus a further amount equal to 100 per cent of that tax. The gazette illustration: a foreign bank account of ₹60 lakh plus foreign income of ₹20 lakh gives ₹24 lakh of tax and ₹24 lakh of penalty, so ₹48 lakh on ₹80 lakh.

Route two catches people who moved back to India. It covers a foreign asset bought out of income accruing outside India while the person was a non-resident, then left out of the relevant Schedule of the return of income after that person became resident. It also covers a foreign asset bought out of income already offered to tax in India and left out of the same Schedule. The condition is a value of ₹5 crore or less. The amount payable is a fee of ₹1 lakh. No tax, no penalty.

The gazette illustration for route two is a plot of land outside India bought in 2015 from income earned abroad while the assessee was a non-resident, worth ₹3 crore on the valuation date, never entered in the Schedule after the move home. Amount payable: ₹1 lakh.

The ceilings are hard. A third illustration adds a foreign mutual fund holding of ₹2.5 crore to quoted shares of ₹4 crore, reaches ₹6.5 crore, and the notification states that the assessee cannot declare under the scheme.

The source

Notification No. 114/2026 [F. No. 370142/18/2026-TPL] came from the Central Board of Direct Taxes and was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), No. 668, dated 14 August 2026. It carries the rules, the valuation method for each class of foreign asset, and Forms 1 to 4.

Chapter IV of the Finance Act, 2026 (4 of 2026), published in the gazette on 30 March 2026, carries the section 133 table, the immunity clause and the exclusions.

The Income Tax Department then opened the filing path on the e-filing portal. The portal news item dated 1 September 2026 points to Form 1 under e-File, Income Tax Forms, File Income Tax Forms, Other Acts.

What it means for an NRI owner

Most of our readers hold a flat in India and live abroad. The scheme is aimed at the other side of that balance sheet.

Section 131 defines who may use it. A person resident in India in the previous year qualifies. So does a non-resident or a not ordinarily resident who was resident in India in the year the income relates to, or in the year the foreign asset was bought. An NRI who has moved back to India is inside the scheme for an asset bought during the non-resident years and left out of the Schedule.

Form 1 lists the asset types: bank account, immovable property, jewellery, artistic work, shares and securities, any other asset, and income. Immovable property held abroad is in scope.

Section 139 grants immunity from further tax or penalty and from prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 for the declared asset, for the year ending 31 March 2026 and earlier years. Section 140 shuts the door on two cases: proceeds of crime with proceedings under the Prevention of Money-laundering Act, 2002, and a year where a Black Money Act assessment has been completed. Section 138 states that nothing paid is refundable.

What to do

Read the section 133 table against your own record of when each foreign asset was bought and what your residential status was that year. The routes turn on that one fact.

The payment clock runs off the filing. Under section 135, the income-tax authority issues an order with the amount payable within one month from the end of the month the declaration is made. Payment falls due within two months from the end of the month the order is received, with a further two months at simple interest of 1 per cent a month or part of a month.

On valuation, rule 5(2) states that a declared fair market value at variance with the value the Assessing Officer arrives at does not make the declaration invalid on that ground alone, where the variance is 20 per cent or less.

For the return and residential status rules that decide which years matter, see our guide to filing as an NRI for AY 2026-27.

FAQ

Does this scheme touch my flat in India? No. The scheme runs on assets located outside India and income arising outside India. A flat in India stays under the normal return and capital gains rules.

I moved back to India in 2024 and never reported a flat I bought in Dubai in 2018 while I was an NRI. What is the number? On the face of section 133, a fee of ₹1 lakh, where the fair market value of that flat on 31 March 2026 is ₹5 crore or less. Take the year of acquisition, your residential status that year and the valuation to a qualified adviser before filing Form 1.

When does the window shut? The rules define the last date as 31 December 2026.

66 MG Road newsdesk

Sources

Information on this page is as on 2026-09-07. Rules, rates, deadlines and government portals change without notice, so verify against the official source before you act. This page is for information only. It is not tax or legal advice, and it is not a substitute for a qualified adviser who knows your position.