Relief for NRIs and Small Taxpayers: FM Introduces One-Time Foreign Income Disclosure Scheme:

Relief for NRIs and Small Taxpayers: FM Introduces One-Time Foreign Income Disclosure Scheme In Budget 2026, the government announced a one-time foreign income disclosure scheme to help small taxpayers and NRIs who have moved abroad. This scheme is meant to resolve practical difficulties faced by these individuals in reporting their overseas income and assets.

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The Finance Minister said that the government aims to resolve the practical problems faced by small taxpayers such as students, young professionals, technology workers, and relocated NRIs. To support them, she proposed introducing a one-time, six-month foreign asset disclosure scheme. Under this scheme, eligible taxpayers will be allowed to disclose overseas income or assets below a specified limit.

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The scheme will apply to two types of taxpayers. The first category includes those who did not disclose their foreign income or assets at all. For the first category, the maximum limit of undisclosed income or assets is proposed to be up to Rs. 1 crore. They will be required to pay 30% of the fair market value of the asset or 30% of the undisclosed income as tax, along with an additional 30% as extra tax instead of a penalty. In return, they will receive immunity from prosecution.

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The second category includes taxpayers who had already disclosed their foreign income and paid the required tax but failed to report the related assets. For this group, the asset value limit is proposed to be up to Rs. 5 crore. They will be granted immunity from both penalty and prosecution by paying a fee of Rs. 1 lakh.