Business

Foreign asset amnesty meets a falling rupee

By Sohail Khan 26 August 2026, 11:52 pm

Benchmarks
Nifty24,207.75-126.8

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
24.16 %

Invest Now

Enter search text:

Business News›News›Economy›Policy›Rupee slide, valuation rules put foreign asset disclosure scheme out of reach for many

Read Today's Paper

Rupee slide, valuation rules put foreign asset disclosure scheme out of reach for many
Synopsis

The rupee's depreciation and strict valuation rules hinder foreign income disclosure. A one-time voluntary disclosure window allows regularization of overseas assets up to one crore. However, many exceed this limit due to currency conversion dates and asset values. Taxpayers explore updated returns and disclosure schemes, risking misrepresentation claims. Clarification on valuation rules is needed for borderline cases and falling-value assets.

Reuters

The rupee's depreciation and strict valuation rules hinder foreign income disclosure. A one-time voluntary disclosure window allows regularization of overseas assets up to one crore.

Mumbai: The rupee's slide over the years, stern valuation rules, and amounts beyond the low stipulated cut-offs are deterring many who want to come clean on undisclosed foreign income and assets.

The one-time voluntary disclosure window, which opened on August 16, allows a person to regularise overseas stocks, properties, ESOPs, dividend, interest etc up to ₹1 crore on payment of 60% tax and penalty.

Also Read: Govt opens tax disclosure window for foreign assets, income

While date of exchange rate for converting dollar assets into INR is fixed as March 31, 2026, the rules don't spell out the corresponding date for income. Given rupee's fall of 14 – 33% in 3-7 years, for many the ₹1 crore is breached if March 31 is taken as currency conversion date.

But, opinions differ. Ved Jain, former ICAI president, said that since under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Rules, 2015, the valuation date for undisclosed foreign asset is the date on which it comes to assessing officer's notice, the scheme takes the valuation date as March 31, 2026 for income as well so as to provide clarity regarding eligibility and for computing tax and penalty.

However, according to chartered accountant Ashish Karundia, "Undisclosed foreign income means income from a source outside India that was chargeable to tax in India but not offered to tax under the 1961 I-T law. The starting point is to determine how that income would have been computed and offered to tax under existing law. This requires reference to the I-T Rules, 1962, including Rule 115, which prescribes conversion of foreign-currency income. Thus, the applicable rate is the one that prevailed during the year income was earned."

Taxpayers with undisclosed income above ₹1 crore (say, ₹2 cr) are exploring options like first filing an 'updated return' followed by filing under Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS). Since tax outgo for updated return could be higher, an assessee could save ₹30-40 lakh.

Thanks to the ₹1 crore cap, there's a temptation to split undisclosed income between an updated return and the FAST-DS scheme (by offering the excess over ₹1 crore to tax through the updated return while claiming the benefit of FAST-DS for the balance), said Harshal Bhuta, a chartered accountant. While this looks attractive given tax differential of up to 40%, along with immunity from penalty and prosecution, one risks the FAST-DS declaration being treated as void on grounds of misrepresentation or suppression of facts, leaving a taxpayer with no recourse in future, said Bhuta.

Also Read: Tax filers scramble to fix foreign asset disclosures: I-T portal data & SMS alerts prompt review of overseas holdings before July 31

Aimed at giving assessees a chance to correct genuine mistakes, the scheme allows declaration of upto ₹5 cr foreign assets acquired with tax-paid money by residents using the liberalised remittance scheme or returning NRIs who missed declaring foreign accounts. But valuation rules can produce curious result.

For several foreign assets, the value is broadly the higher of acquisition cost and market value. "If an overseas asset bought for ₹5.25 crore is today worth only ₹3 crore, its value for the scheme may still remain ₹5.25 crore. The taxpayer could therefore fall outside the scheme," said advocate Priyanshi Chokshi.

Where the prescribed valuation is not done, indexed cost of acquisition is the deemed fair market value. Consider a property bought for ₹4 crore is now worth ₹3.5 crore, while its indexed cost is ₹5.2 crore. Here, the indexed cost pushed the taxpayer beyond the ₹5 crore limit. "In borderline cases, valuation is not merely a compliance exercise. It could decide eligibility itself. Some clarification on falling-value assets and borderline cases would help," said Chokshi.

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our WhatsApp channel)

(You can now subscribe to our WhatsApp channel)

Read More News on
Tax AmnestyUndisclosed Foreign IncomeForeign Assets DisclosureExchange Rate Valuation

Enter search text:

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year