NEW DELHI: In a move aimed at easing compliance for students, young professionals, tech employees, and returning NRIs with minor overseas holdings, the Union Budget has proposed a one-time, six-month foreign asset disclosure window with immunity from prosecution for eligible taxpayers.
Announcing the measure, Finance Minister Nirmala Sitharaman said the scheme is meant to address practical issues faced by small taxpayers who may have inadvertently failed to disclose foreign income or assets of relatively modest value. The scheme will apply retrospectively from October 1, 2024.
At present, there is no penalty for non-disclosure of non-immovable foreign assets with an aggregate value below Rs 20 lakh. The Budget now proposes to grant immunity from prosecution for such past non-disclosures and to introduce a structured disclosure route for higher amounts through a formal scheme.
Experts say the government’s decision follows insights gathered through exchange of information with foreign jurisdictions and discrepancies noticed in foreign income reporting during tax department’s NUDGE campaign.
Under the scheme, taxpayers who failed to disclose overseas income and assets up to Rs 1 crore can regularise these by paying 30% of the fair market value and income, along with an additional 30% in lieu of penalty, and receive immunity from prosecution.
A policy boost for GIFT City
Relaxations: A Budget 2026 introduces major relaxations for units in India’s International Financial Services Centre (IFSC), extending the income-tax holiday period from 10 years to 20 years and setting a competitive tax rate of 15% post-deduction
Financial hub: This policy stability strengthens GIFT City’s position as a globally competitive financial hub
Dividend provisions : The rationalisation of deemed dividend provisions for treasury centres is also a positive step
Attractive destination: Together, these measures make GIFT City an attractive destination for global financial operations