The scheme covers certain foreign assets and income that were not disclosed earlier, subject to prescribed limits and payment of tax or a fee.
Who can use it?
The scheme covers eligible residents, and in specified cases, people who are now non-residents or RNORs but were residents when the foreign income was earned or the asset was acquired.
It can be used where a taxpayer did not file a return, failed to disclose the foreign asset or income in a return already filed, or the income or asset escaped assessment.
What can be disclosed?
There are two broad categories.
The first covers undisclosed foreign assets or foreign income not offered to tax in India. The combined value cannot exceed ₹1 crore.
The second covers foreign assets that were already offered to tax or acquired when the taxpayer was non-resident, but were not reported in the relevant ITR schedule. The asset value cannot exceed ₹5 crore.
How much does it cost?
For undisclosed foreign assets or income, the taxpayer pays 30% tax plus an additional amount equal to the tax, effectively 60% of the declared value.
For assets that were already taxed but were missed from the ITR disclosure, the scheme provides for a ₹1 lakh fee, provided the asset value is within the ₹5 crore limit.
How is the asset valued?
The valuation date is March 31, 2026. Broadly, the fair market value is the higher of the acquisition cost and the open-market value on that date. Separate valuation rules apply to property, shares, jewellery and foreign bank accounts.
For a foreign bank account, the value is broadly based on deposits made up to March 31, 2026, subject to specified exclusions.
How does the process work?
The declaration has to be filed online in Form 1, along with documents supporting the asset or income and valuation documents where applicable.
The tax authority will issue a payment order in Form 2. The taxpayer generally gets two months to pay, with a further period of up to two months allowed at 1% simple interest per month or part thereof.
After payment, Form 3 has to be filed, following which the authority issues a certificate in Form 4.
What protection does it provide?
For a valid declaration and payment, the taxpayer gets specified immunity from further tax, penalty and prosecution under the Black Money Act in respect of the declared income or asset.
However, the scheme does not apply to assets or income representing proceeds of crime where proceedings are pending under the Prevention of Money-laundering Act, or to assessment years where proceedings under the Black Money Act have already been completed.
What should taxpayers check?
The key question is whether the foreign asset or income was never disclosed for tax purposes, or whether it was already taxed but simply missed from the foreign-assets disclosure in the ITR.
The applicable limit, valuation and payment are different for the two categories. Taxpayers considering the window should therefore establish the nature, value and tax history of the foreign asset before filing.
The declaration window closes on December 31, 2026.
