Income Tax Portal Opens Form 1 for Foreign Asset Disclosure Scheme; December 31 Filing Cut-Off Applies
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The Income Tax Department has moved the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 from notification into active filing. The e-Filing portal now states that Form 1 is available for filing and gives the online path for eligible taxpayers to submit declarations under the one-time scheme.
This is a new operational step. CBDT had notified the Foreign Assets of Small Taxpayers-Disclosure Scheme Rules, 2026 through Notification No. 114/2026 dated August 14, 2026, effective August 16. With Form 1 live from September 1, taxpayers and advisers can now move from eligibility analysis to actual electronic filing.
Filing path and deadline
The official portal gives the path as e-File → Income Tax Forms → File Income Tax Forms → Under Other Acts → Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 → Form 1. The rules define December 31, 2026 as the last date and March 31, 2026 as the valuation date for covered assets.
₹1 crore and ₹5 crore limits are different
Form 1 separates declarations into categories. For the first category, the aggregate value of undisclosed foreign income and undisclosed foreign assets cannot exceed ₹1 crore. For specified foreign assets in the second category, the aggregate value cannot exceed ₹5 crore.
The form also states the financial consequence. The first-category amount is computed at 60% of the relevant value. The rules illustrate an ₹80 lakh foreign bank account producing ₹48 lakh payable. For qualifying second-category assets, the form provides for a ₹1 lakh fee.
The second category includes specified foreign assets acquired from income earned outside India while the taxpayer was a non-resident but omitted from the relevant foreign-asset schedule after becoming resident, and assets acquired from income already offered to tax but not reported in the relevant return schedule.
What Form 1 asks taxpayers to establish
The form seeks name, address, PAN and passport information where applicable, followed by the type of asset or income, relevant previous year of acquisition or earning, residential status for that year, supporting evidence and the nature of the asset. The listed asset classes include bank accounts, immovable property, jewellery, artistic works, shares and securities and other assets.
Residential status matters because eligibility can depend on when and from what income the foreign asset was acquired. Passport details are specifically required where the declarant relies on non-resident status for a relevant year.
Valuation needs a documented working paper
Notification 114/2026 contains detailed valuation rules. Depending on the asset, valuation can refer to acquisition cost, open-market value, quoted prices or another prescribed method. Bank accounts have a separate credit-based computation. In certain cases where an external valuation is not carried out, indexed cost of acquisition may be deemed to be fair market value.
The rules also provide a limited safeguard for non-bank assets: a later value determined by a tax authority does not by itself invalidate the declaration for misrepresentation where the variance does not exceed 20% of the fair market value declared. Advisers should still retain valuation reports, statements and acquisition records capable of supporting the figure used.
Forms 2, 3 and 4 complete the process
Form 1 starts the workflow. The income-tax authority passes an electronic payment order in Form 2. The declarant makes payment and submits proof in Form 3. The authority then issues Form 4 certifying the validity of the declaration and payment.
The rules illustrate a two-month payment period from the end of the month in which the Form 2 order is passed. A further permitted period carries 1% interest for every month or part of a month; payment beyond the outer permitted period causes the scheme benefit to be unavailable.
Immediate checklist for CAs and taxpayers
- Prepare a complete inventory of relevant foreign assets and income before opening Form 1.
- Reconcile residential status year by year and identify which declaration category applies.
- Use March 31, 2026 as the prescribed valuation date and retain supporting workings.
- Confirm the ₹1 crore or ₹5 crore threshold before computing the amount or fee.
- Check the Finance Act and notified rules for exclusions; a live Form 1 does not make every historical omission eligible.
Practical takeaway: the scheme is now operational, not merely notified. Taxpayers who may qualify should use the period before December 31 to establish eligibility, complete valuation and documentation and file through the official e-Filing route.
Useful official links
Key takeaway
Fresh September 1 portal rollout creates immediate search demand distinct from earlier notification coverage; taxpayers and advisers now need filing path, thresholds, valuation date and workflow.
