Foreign Assets Of Small Taxpayers Disclosure Scheme, 2026

Legislative Background

• The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (‘BMA’) was enacted to tax the undisclosed foreign income and assets held by the resident taxpayers. In case of any default in reporting foreign income or foreign assets in the return of income, the BMA provides for stringent consequences, including levy of tax, interest and penalties.
• At the time of its introduction, a one-time compliance window was provided from July 2015 to September 2015 (‘2015 Scheme’), enabling taxpayers to voluntarily declare undisclosed foreign assets acquired up to 31 March 2015, subject to payment of tax at 30% and penalty equal to 100% of such tax.
• The Government has since observed a significant number of reporting defaults and instances of non-disclosure of foreign assets, particularly in cases involving small taxpayers.