CBDT Increases Exemption Limit to ₹20 Lakh for Undisclosed Foreign Assets [Read Instruction]

The Central Board of Direct Taxes (CBDT), under the Ministry of Finance, issued Instruction No. 01/2025 on 18th August 2025, announcing major relief to taxpayers by increasing the exemption threshold under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The limit for prosecution has been raised from Rs. 5 lakh to Rs. 20 lakh.

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This means that if the total value of a person’s undisclosed foreign assets (excluding immovable property like land or houses abroad) is Rs. 20 lakh or less, then criminal prosecution will not be launched under Sections 49 and 50 of the Act. The change came into effect from October 1, 2024, after the Finance (No. 2) Act, 2024 amended the law.

What does this mean for taxpayers?

Earlier, even if someone forgot to disclose a small foreign bank account or a minor overseas investment worth more than Rs. 5 lakh, they could face prosecution. Now, this protection extends up to Rs. 20 lakh.

However, this does not mean taxpayers can avoid disclosure.

• All foreign assets even if very small still need to be reported in the income tax return.
• The raised limit only protects individuals from prosecution (criminal cases) if they fail to disclose such assets and the total value is below Rs. 20 lakh.
• Non-disclosure can still lead to penalty, tax liability, and questioning, even if prosecution is avoided.

According to CBDT, this step was taken to prevent hardship for taxpayers who may have small overseas balances or investments, which sometimes go unnoticed. The government wants to focus on serious cases of black money and tax evasion, not minor foreign holdings.

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