The Indian government opened a tax amnesty scheme on Sunday, August 16, allowing small taxpayers to declare previously undisclosed foreign assets. The program, which covers assets worth up to 50 million rupees ($523,889), is scheduled to remain open through December 31, 2026.
The finance minister first announced the initiative during the February 1 budget presentation. The scheme specifically targets individuals classified as small taxpayers, including students and non-resident Indians who may have financial interests or income outside of the country.
Under the terms of the program, taxpayers with undisclosed foreign income of up to 10 million rupees ($104,778) can resolve their tax status by paying a 30% tax plus a penalty of an equal amount. For those who acquired foreign assets worth up to 50 million rupees that were already taxed but not properly reported in previous tax returns, the government is offering a one-time settlement for a flat fee of 100,000 rupees ($1,048). The market value for all declared assets will be calculated based on their worth as of March 31, 2026.
For an individual student or worker with 10 million rupees in undisclosed foreign income, the immediate day-to-day impact will be a significant one-time payment. A person in this category would be required to pay 3 million rupees in tax and another 3 million rupees as a penalty, totaling 60% of the undisclosed amount. Conversely, those who have already paid taxes on their foreign assets but failed to report them in their annual filings will notice a much smaller financial impact, consisting of a fixed 100,000 rupee fee to correct their records. These participants will likely see a change in their legal standing with tax authorities, potentially avoiding future audits or litigation related to these specific assets.
The program sets a precedent for how the Indian government manages small-scale financial non-compliance among its diaspora and mobile workforce. By distinguishing between those who evaded taxes and those who committed reporting errors, the policy creates a two-tiered system for regularizing foreign holdings. The amnesty window is finite, closing on December 31, 2026. After this deadline, the government has not specified what enforcement actions or higher penalties might apply to those who did not participate. Taxpayers must ensure their asset valuations are calculated based on the March 31, 2026 market value to comply with the filing requirements.