Budget 2026: FM Sitharaman offers relief on small foreign assets, six-month disclosure window opened

Budget immunity for small foreign assets

Finance Minister Nirmala Sitharaman announced a series of tax and compliance measures in the Union Budget 2026–27 aimed at easing the burden on small taxpayers while tightening oversight in specific areas.

A key announcement was immunity from prosecution for non-disclosure of small foreign assets. Under the proposal, individuals who failed to disclose non-immovable foreign assets with an aggregate value of less than Rs. 20 lakh will not face prosecution. The exemption will apply retrospectively from October 1, 2024, offering relief to those holding low-value overseas assets.

“Minor offences to attract fine only… no penalty on non-disclosure of non-immovable foreign assets with aggregate value less than Rs. 20 lakh… I propose to provide them immunity from prosecution,” Sitharaman said while presenting the Budget.

Alongside this, the finance minister announced a one-time, six-month foreign asset disclosure scheme, targeted at a limited category of taxpayers, including students. The scheme will allow individuals who previously failed to declare overseas assets or income to come forward within the six-month window. It will apply to those who did not disclose foreign assets or income up to a value of Rs. 1 crore, as well as to those who had disclosed such assets earlier, provided the asset value does not exceed Rs. 5 crore.

The Budget also introduced a compliance measure affecting non-residents. FM Sitharaman said tax will be deducted at source (TDS) on the sale of immovable property by non-residents, a move aimed at strengthening tax collection and transparency in cross-border property transactions.

Taken together, the measures signal a calibrated approach—offering relief and clarity for small and inadvertent non-compliance, while reinforcing reporting and tax enforcement where higher-value transactions are involved.