Foreign Assets Disclosure Form 1 Is Live: Who Should Check It Before 31 December?

Updated: 12 November 2026 · Tax Filing Guru Editorial Team

Found an old overseas bank account or shares that did not appear in an Indian tax return? The Income Tax Department has made Form 1 of the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 available through the e-filing portal. Its official Form 1 FAQs say a declaration must be filed by 31 December 2026.

The word “small” does not mean every omission is eligible. The scheme has two categories with different conditions and amounts payable. The first step is to establish what was omitted, how it was funded, its value and your residential status in the relevant year.

What are the two categories?

Category 1: Untaxed foreign asset or income. This covers an eligible undisclosed asset located outside India or foreign income chargeable to tax in India that was not offered to tax. The aggregate of the asset value as on 31 March 2026 and the undisclosed foreign income must not exceed ₹1 crore. The department's FAQ describes tax of 30% plus an equal additional amount, making the effective payment 60% of the declared value or income.

Category 2: Explained asset with a reporting lapse. This covers certain foreign assets acquired from income earned while non-resident, or from income already offered to tax in India, that were not reported in the relevant return schedule after the applicable residential-status change. The aggregate asset value must not exceed ₹5 crore. The FAQ describes a flat ₹1 lakh fee. An asset funded with taxed income can still require separate analysis if it later generated untaxed income.

These descriptions are screening points, not a substitute for checking the scheme provisions against your facts. In particular, the official FAQ says residential status must be examined for the year the income arose or the asset was acquired, rather than only on the day you file.

What should you gather before opening Form 1?

1. Earlier returns: Keep the complete returns and foreign-asset schedules for the relevant years, along with the residential-status history.
2. Asset and income records: Collect bank statements, brokerage or employer-share records, acquisition dates, sale and dividend records, and documents showing the source of funds.
3. Valuation support: The scheme uses a 31 March 2026 valuation date for assets. Follow the prescribed method for each asset type; do not guess a current market value.
4. Identity and filing details: Confirm your PAN, portal access and any supporting documents needed for the relevant Form 1 annexure.

The official user manual describes the online route: log in, choose e-File → Income Tax Forms → File Income Tax Forms, then find Form 1 under “Forms as per other Acts”. It also lists the information and attachments required. Review the draft carefully before verification.

What happens after filing?

Form 1 is a declaration, not the final certificate. The department's timetable lists a Form 2 order determining the amount payable, payment and a Form 3 intimation by the taxpayer, then a Form 4 order certifying validity. The FAQ gives the respective periods for those later steps, so preserve every acknowledgement and follow the order you receive.

The FAQ also lists exclusions, including specified proceeds-of-crime cases and certain completed assessments under the Black Money Act. Some pending assessments have separate treatment. If any notice or proceeding already exists, review it before deciding whether to file under the scheme. Filing a new Form 1 before Form 2 is issued can make an earlier Form 1 non-actionable; the latest submission becomes the operative one.

Should you use it for foreign shares already taxed in salary?

Possibly, but payroll tax alone does not answer the foreign-asset disclosure question. Compare the benefit, acquisition, holdings, later income and return schedules for the relevant years. Our earlier foreign-shares guide explains why Schedule FA should be checked separately from salary tax. A scheme declaration should follow a full eligibility review, not a headline or a single missing checkbox.

Takeaway: Form 1 is live and the 31 December date matters. Start with records and category screening, then decide whether this scheme is the correct route. For a review of your specific foreign asset, income and past returns, contact Tax Filing Guru.