MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 14th August, 2026
INCOME-TAX
G.S.R. 732(E).— In exercise of the powers conferred by section 143 of the Finance Act, 2026 (4 of 2026), the
Central Government hereby makes the following rules, namely:—
1. Short title and commencement.– (1) These rules may be called the Foreign Assets of Small Taxpayers- Disclosure Scheme Rules, 2026.
(2) They shall come into force on the 16th day of August, 2026.
2. Definitions.– (1) In these rules, unless the context otherwise requires,–
(a) “Act” means the Finance Act, 2026 (4 of 2026);
(b) “Indexed cost of acquisition” shall have the same meaning as assigned to it in section 48 of the Income-tax Act, 1961 (43 of 1961);
(c) "Form" means a Form appended to these rules;
(d) “section” means a section of the Finance Act, 2026 (4 of 2026) in Chapter IV; and
(e) “valuation date” means the 31st day of March, 2026.
(2) Words and expressions used in these rules and not defined but defined in the Act or the Income-tax Act, 1961 (43 of 1961) or the Income-tax Act, 2025 (30 of 2025) or the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) shall have the meanings respectively assigned to them in those Acts.
(3) For the purposes of the Act and these rules, “income-tax authority” shall mean the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be.
(4) For the purposes of the Act and these rules, “last date” shall mean the 31st day of December, 2026.
3. Fair market value.– (1) For the purposes of clause (l) of sub-section (1) of section 131 of the Act, the fair market value of the assets shall be determined in the following manner, namely:—
(a) value of bullion, jewellery or precious stone shall be the higher of,—
(i) its cost of acquisition; and
(ii) the price that the bullion, jewellery or precious stone shall ordinarily fetch if sold in the open market on the valuation date for which the assessee may obtain a report from a valuer recognised by the Government of a country or specified territory outside India or any of its agencies for the purpose of valuation of bullion, jewellery or precious stone under any regulation or law:
Provided that the indexed cost of acquisition shall be deemed to be the fair market value where the valuation as per sub-clause (ii) is not carried out;
(b) valuation of archaeological collections, drawings, paintings, sculptures or any work of art (hereinafter referred to as artistic work) shall be the higher of,—
(i) its cost of acquisition; and
(ii) the price that the artistic work shall ordinarily fetch if sold in the open market on the valuation date for which the assessee may obtain a report from a valuer recognised by the Government of a country or specified territory outside India or any of its agencies for the purpose of valuation of artistic work under any regulation or law:
Provided that the indexed cost of acquisition shall be deemed to be the fair market value where the valuation as per sub-clause (ii) is not carried out;
(c) valuation of shares and securities,—
(i) the fair market value of quoted shares and securities shall be the higher of,—
(I) its cost of acquisition; and
(II) the price as determined in the following manner, namely:—
(A) the average of the lowest and highest price of such shares and securities quoted on any established securities market on the valuation date; or
(B) where on the valuation date there is no trading in such shares and securities on any established securities market, average of the lowest and highest price of such shares and securities on any established securities market on a date immediately preceding the valuation date when such shares and securities were traded on such securities market;
(ii) the fair market value of unquoted equity shares shall be the higher of,—
(I) its cost of acquisition; and
(II) the value, on the valuation date, of such equity shares as determined in the following manner, namely:—
the fair market value of unquoted equity shares = [(A+B-L)*(PV)]/(PE)
where,
A = book value of all the assets (other than bullion, jewellery, precious stone, artistic work, shares, securities and immovable property) as reduced by,-
(i) any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any, and
(ii) any amount shown as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset;
B = fair market value of bullion, jewellery, precious stone, artistic work, shares, securities and immovable property as determined in the manner provided in this rule;
L = book value of liabilities, but not including the following amounts, namely:—
(i) the paid-up capital in respect of equity shares;
(ii) the amount set apart for payment of dividends on preference shares and equity shares;
(iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation;
(iv) any amount representing provision for taxation, other than amount of income-tax paid, if any, less the amount of income-tax claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto;
(v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities;
(vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares;
PE = total amount of paid-up equity share capital as shown in the balance-sheet; PV = the paid-up value of such equity shares:
Provided that the indexed cost of acquisition shall be deemed to be the fair market value where the valuation as per item (II) is not carried out;
(iii) the fair market value of an unquoted share and security other than equity share in a company shall be the higher of,—
(I) its cost of acquisition; and
(II) the price that the share or security shall ordinarily fetch if sold in the open market on the valuation date for which the assessee may obtain a report from a valuer recognised by the Government of a
country or specified territory outside India or any of its agencies for the purpose of valuation of share and security under any regulation or law:
Provided that the indexed cost of acquisition shall be deemed to be the fair market value where the valuation as per item (II) is not carried out;
(d) the fair market value of an immovable property shall be the higher of,—
(i) its cost of acquisition; and
(ii) the price that the property shall ordinarily fetch if sold in the open market on the valuation date for which the assessee may obtain a valuation report from a valuer recognised by the Government of a country or specified territory outside India in which the property is located or any of its agencies for the purpose of valuation of immovable property under any regulation or law:
Provided that the indexed cost of acquisition shall be deemed to be the fair market value where the valuation as per sub-clause (ii) is not carried out;
(e) value of an account with a bank shall be, -
(i) the sum of all the deposits made in the account with the bank from the date of opening of the account till the valuation date; or
(ii) where a declaration of such account has been made under Chapter VI of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015) and the value of the account as computed under sub-clause (i) has been charged to tax and penalty under that Chapter, the sum of all the deposits made in the account with the bank since the date of such declaration:
Provided that where any deposit is made from the proceeds of any withdrawal from the account, such deposit shall not be taken into consideration while computing the value of the account.
(4) The fair market value of an asset determined in a currency which is one of the permitted currencies designated by the Reserve Bank of India under the Foreign Exchange Management (Deposit) Regulations, 2016, shall be converted into Indian currency as per the reference rate of the Reserve Bank of India on the valuation date.
(5) Where the fair market value of an asset is determined in a currency other than one of the permitted currencies designated by the Reserve Bank of India, then, such value shall be converted into United States Dollar on the valuation date as per the rate specified by the Central Bank of the country or jurisdiction in which the asset is located and such value in United States Dollar shall be converted into Indian currency as per the reference rate of the Reserve Bank of India on the valuation date:
Provided that where the Central Bank of the country or jurisdiction in which the asset is located does not specify the rate of conversion from its local currency to United States Dollar then such rate shall be the one as specified by any other bank regulated under the laws of that country or jurisdiction.
Explanation 1.—For the purposes of this rule,—
(a) "established securities market" means an exchange that is officially recognised and supervised by a Governmental entity in which the market is located and that has a meaningful annual value of shares traded on the exchange;
(b) "meaningful annual value of shares traded on the exchange" with respect to an exchange means it has an annual value of shares traded on the exchange (or a predecessor exchange) exceeding one billion United States Dollar during each of the three calendar years immediately preceding the valuation date;
(c) "meaningful volume of trading on an on-going basis" with respect to each class of shares means,—
(i) trades in each such class are effected, other than in de minimis quantities, on one or more established securities markets on at least sixty business days during the prior calendar year; and
(ii) the aggregate number of shares in each such class that are traded on such market or markets during the prior year are at least ten per cent. of the average number of shares outstanding in that class during the prior calendar year;
(d) "quoted share or security" means the share or security which has a meaningful volume of trading on an on going basis on an established securities market and is regularly quoted by dealers where they actively do offer to, and in fact do, purchase the share from, and sell the share to, customers who are not related to the dealer in the ordinary course of a business;
(e) "unquoted share and security", in relation to a share or security, means a share or security which is not a quoted share or security.
4. Amount payable by declarant.– Where a declarant files a declaration to the income-tax authority under section 132 of the Act, in respect of assets or income as specified in column (2) of the Table in section 133 of the Act, the amount payable by the declarant shall be as specified in column (3), subject to the conditions in column (4) thereof.
5. Declaration of asset or income located outside India.– (1) A declaration in respect of any asset or income referred to in section 133 of the Act shall be made electronically in Form 1 to the income-tax authority such that the aggregate value of undisclosed income and undisclosed assets declared under section 133 (Table: Sl. No 1) shall not exceed ? 1 crore and the aggregate value of undisclosed assets declared under section 133 (Table: Sl. No 2) shall not exceed ? 5 crore.
(2) For the purposes of sub-section (3) of section 134 of the Act, where the fair market value of any asset (other than a bank account) declared in Form 1 is at variance with the value determined by the Assessing Officer or any other income-tax authority during the course of any assessment or inquiry proceedings, such declaration shall be deemed not to be invalid or void on the ground of misrepresentation, suppression of facts, or furnishing of false material particulars, only on account of such variance, if such variance does not exceed twenty per cent. of the fair market value so declared.
6. Order by income-tax authority.– The income-tax authority shall pass an order referred to in sub-section (1) of section 135 electronically in Form 2, in respect of payment of amount payable by the declarant, along with penalty or fee.
7. Intimation of payment.– The declarant shall make the payment of the amount determined in the order passed by the income-tax authority under sub-section (1) of section 135 electronically, and the intimation of such payment made, including interest, if any, shall be furnished along with proof of payment to the income-tax authority electronically in Form 3.
8. Order certifying payment.– The income-tax authority shall pass an order, certifying the validity of the declaration in Form 1 and payment by the declarant for the purposes of section 139 of the Act, within one month from the end of the month of the submission of intimation of payment electronically in Form 4.
9. Laying down of procedure, formats and standards.– (1) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall lay down the data structure, standards and procedure of furnishing and verification of the declaration and undertaking, –
(i) under digital signature, if the return of income is required to be furnished under digital signature; or
(ii) through electronic verification code in a case not covered under clause (i), for declaration in Form 1 under rule 5, order in Form 2 under rule 6, intimation of payment in Form 3 under rule 7 and order certifying validity of declaration and payment in Form 4 under rule 8, including modification in format, if required, to make it compatible for furnishing electronically.
(2) The Principal Director General of Income-tax (Systems) or the Director General of Income- tax (Systems) shall also be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to the said Forms.