On 1 September 2026, the Central Board of Direct Taxes (CBDT) issued Notification No. 114/2026 [F. No. 370142/18/2026-TPL], formally notifying the rules and prescribed forms under the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026. This scheme, introduced under the Finance Act 2026, provides a one-time compliance window for small taxpayers to declare undisclosed foreign assets and income without facing stringent penal consequences under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The notification specifies the eligibility criteria, disclosure procedures, tax rates, and the forms required for filing, marking a significant step in the government’s efforts to widen the tax base while offering a lenient pathway for minor taxpayers. The scheme reflects a policy shift towards voluntary compliance and reduced litigation for low-value offshore holdings, aligning with global transparency standards while protecting genuine small taxpayers from disproportionate penalties.
Key Takeaways
- Eligibility and Scope: The scheme applies to resident taxpayers whose total undisclosed foreign income and assets do not exceed a prescribed threshold, typically aimed at individuals with minor foreign holdings such as small bank accounts, shares, or immovable property acquired inadvertently. Corporate entities, partnerships, and high-net-worth individuals are explicitly excluded, ensuring the relief targets only small taxpayers as defined by the CBDT.
- Disclosure Procedure and Taxation: Taxpayers must file a declaration in the newly prescribed Form FA-STD (Foreign Assets – Small Taxpayer Disclosure) along with payment of tax at a flat rate of 30% on the value of undisclosed assets plus applicable surcharge and cess. No additional penalty, interest, or prosecution will be initiated for declarations made under this scheme, provided the disclosure is complete, accurate, and made within the stipulated window.
- Compliance Timeline and Forms: The scheme opens on 1 October 2026 and closes on 31 March 2027. The notification details the mandatory attachments, including statements of foreign assets, source of funds, and a declaration of no prior concealment. The CBDT has also enabled electronic filing through the e-filing portal, with offline utilities to be released shortly to facilitate seamless compliance.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement