About Foreign Assets of Small Taxpayers – Disclosure Scheme:
- It is a one-time voluntary disclosure scheme contained in Chapter IV of the Finance Act, 2026.
- It enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets on payment of a specified tax or fee.
- Asset includes immovable property, jewellery, artistic work, shares, securities or any other asset or income,
- The scheme applies to two broad categories of asset or income
- Category 1: An undisclosed foreign asset or foreign income that was not previously offered to tax, the aggregate value must not exceed ₹1 crore.
- Under this, taxpayers need to pay 30% of fair market value of assets or 30% of undisclosed income as tax and 30% as additional income tax in lieu of penalty in order to get immunity from prosecution.
- Category 2: It covers foreign assets that were already offered to tax or acquired when the taxpayer was a non-resident but were not reported in the relevant tax-return schedule. The threshold for such declarations is ₹5 crore.
- For this category, immunity from both penalty and prosecution is available with the fee payment of Rs 1 lakh.
- Immunity: Taxpayers making valid declarations will receive immunity from any further tax or penalty and from prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
