Income Tax Department Urges Taxpayers to Disclose Undeclared Foreign Properties Before December 31

By The Realty Times | Real Estate News Services

NEW DELHI: The Income Tax Department has stepped up efforts to identify undeclared overseas assets, urging eligible Indian taxpayers to disclose foreign properties and other assets before the December 31, 2026 deadline under a one-time voluntary disclosure scheme.

The initiative is part of the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS), 2026, which provides eligible taxpayers an opportunity to regularise certain previously undisclosed foreign assets and income by paying the prescribed tax or fee. The department has reportedly sent targeted communications to taxpayers suspected of holding unreported overseas assets, including residential and commercial properties in the United Arab Emirates (UAE).

Foreign Property Owners Under the Tax Department’s Scanner

The department has been analysing information received from overseas jurisdictions and other sources to identify possible discrepancies between foreign asset ownership and disclosures made in Indian income tax returns.

Taxpayers have received emails and messages advising them to review their foreign asset information and use the available disclosure window where applicable. The exercise reflects the authorities’ increasing ability to identify overseas holdings through international information-sharing arrangements and targeted investigations.

Foreign real estate investments, particularly in markets such as Dubai and other parts of the UAE, have attracted Indian investors in recent years. The latest initiative serves as a reminder that eligible Indian residents must comply with applicable reporting requirements for foreign assets and income.

What Is the FAST-DS 2026 Scheme?

The government introduced FAST-DS as a one-time opportunity for eligible taxpayers to disclose specified foreign assets or foreign income that had not been properly reported.

The scheme covers two broad categories, subject to eligibility conditions:

• Previously undisclosed foreign assets or income: For eligible declarations involving an aggregate value of up to ₹1 crore, the prescribed payment generally comprises tax at 30% of the relevant asset value or undisclosed income, plus an additional amount equal to that tax.
• Certain foreign assets acquired from disclosed or previously non-taxable sources: Eligible assets valued up to ₹5 crore may qualify for a flat disclosure fee of ₹1 lakh, including specified cases involving assets acquired while the taxpayer was a non-resident or using income already offered to tax in India.

The applicable category depends on the source of the asset, its value, the taxpayer’s residency history and other statutory conditions. A declaration is not automatically eligible merely because the asset is within the stated monetary limit.

Deadline: December 31, 2026

The disclosure window opened on August 16, 2026, and closes on December 31, 2026. According to reports published in October, approximately 1,100 taxpayers had applied under the scheme at that stage.

Eligible taxpayers must submit the prescribed declaration through the Income Tax Department’s e-filing portal and follow the applicable procedures for assessment of the amount payable and payment.

The department has also enabled a facility through which taxpayers can view certain foreign asset information reported against their Permanent Account Numbers (PANs) by overseas jurisdictions under international information-sharing arrangements. Information for 2022–2024 is available for relevant jurisdictions participating in these arrangements.

What Should Property Investors Do?

Indian taxpayers who own apartments, villas, commercial properties, overseas bank accounts, foreign shares or other international assets should review their reporting obligations carefully.

They should verify the original source of investment, purchase records, ownership documents, foreign income and previous income tax returns. They should also check whether the assets were required to be disclosed in the relevant foreign asset schedules and whether any rental income or other taxable income was reported.