India launches tax amnesty for small taxpayers with undisclosed foreign assets

Sunday 16 August 2026 - 10:30

By: Sahili Aya

India launches tax amnesty for small taxpayers with undisclosed foreign assets

India has opened a one-time tax amnesty aimed at smaller taxpayers who have failed to report certain foreign income or assets, giving eligible individuals until the end of 2026 to regularize their tax affairs under simplified terms.

The initiative, announced by the government on Sunday, is designed to bring previously undeclared overseas holdings into the tax system while offering relief to taxpayers whose cases fall below specified financial thresholds.

Scheme targets smaller taxpayers

The programme was first announced by India’s finance minister in the February 1 budget. Among those expected to benefit are students, non-resident Indians and other taxpayers with relatively modest foreign holdings or income.

The government has set different conditions depending on whether the taxpayer failed to disclose foreign income or simply omitted assets that had already been subject to tax.

Individuals with undisclosed foreign income of up to 10 million rupees, equivalent to about $104,778, can enter the scheme through December 31, 2026. Participants must pay tax equal to 30% of the relevant income, along with an additional penalty of the same amount.

The combined financial obligation therefore amounts to 60% of the undisclosed income covered by the arrangement.

A separate route for previously taxed assets

The amnesty also covers taxpayers who acquired foreign assets worth up to 50 million rupees, or approximately $523,889, but failed to include those holdings in their tax returns even though the assets had already been taxed.

For this category, eligible taxpayers can make use of the one-time settlement by paying a fixed amount of 100,000 rupees, around $1,048.

The measure distinguishes between undeclared income and assets that were not properly reported, giving taxpayers a potentially less costly route to correct omissions involving already-taxed foreign property.

Valuation date fixed by the government

India has also established a common valuation date for determining the market value of foreign assets covered by the programme.

The relevant value will be calculated as of March 31, 2026, providing a fixed reference point for taxpayers and authorities when assessing eligibility and determining the scope of assets subject to the scheme.

The deadline for applications is December 31, leaving taxpayers several months to review their overseas holdings and determine whether they qualify.

Push for greater tax compliance

The initiative comes as India continues efforts to improve transparency around assets and income held abroad. By offering a defined window for voluntary disclosure, the government is seeking to encourage taxpayers with relatively small undisclosed holdings to come forward rather than remain outside the formal reporting system.

For taxpayers, the programme provides a temporary opportunity to resolve certain reporting failures under clearly defined financial conditions. For the authorities, it offers a mechanism to bring previously unreported foreign assets and income into the tax framework.

The effectiveness of the initiative will depend on how many eligible taxpayers choose to participate before the year-end deadline and whether the scheme succeeds in encouraging wider compliance with India’s foreign-asset reporting requirements.