Union Budget 2026 Provides Immunity for Small Foreign Assets and Opens 6 Month Disclosure Window

The Union Budget 2026‑27 announced measures to ease compliance for taxpayers holding low‑value overseas assets, while tightening reporting on higher‑value transactions and non‑resident property sales. 

Immunity for Small Foreign Assets Under ₹20,00,000 

Finance Minister Nirmala Sitharaman stated that individuals who failed to disclose non‑immovable foreign assets with a total value below ₹20,00,000 will not face prosecution. The relief applies retrospectively from October 1, 2024, offering protection to taxpayers with modest overseas holdings. 

Six-Month One-Time Disclosure Scheme 

A one‑off disclosure window of six months will open for a limited group of taxpayers, including students. The scheme allows those who omitted foreign assets or income up to ₹1,00,00,000 to come forward without penalty. Taxpayers who previously disclosed assets can also use the window provided the aggregate value does not exceed ₹5,00,00,000. 

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TDS on Property Sales by Non-Residents 

The Budget introduces tax deducted at source on the sale of immovable property by non‑resident Indians. The measure aims to improve tax collection and transparency in cross‑border real estate transactions. The TDS rate aligns with existing provisions for similar capital gains. 

Key Dates and Implementation 

The immunity provision and disclosure scheme were announced on February 1, 2026. The six‑month window is expected to commence shortly after the Budget announcement, with detailed guidelines to be issued by the Income Tax Department. The TDS rule on non‑resident property sales will take effect from the start of the next financial year. 

Conclusion 

Budget 2026 offers prosecution immunity for undisclosed foreign assets below ₹20,00,000, provides a six‑month voluntary disclosure period for assets up to ₹5,00,00,000, and mandates TDS on property sales by non‑residents, balancing relief for small taxpayers with enhanced compliance for larger transactions. 

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