The oldest reference to Idealism in Hindu texts is in Purusha Sukta of the Rig Veda. This sukta espouses panentheism by presenting cosmic being Purusha as both pervading all universe and yet being transcendent to it.1 Absolute idealism can be seen in Chāndogya Upaniṣad, where things of the objective world like the five elements and the subjective world such as will, hope, memory etc. are seen to be emanations from the Self.2
The essence of Hindu Idealism is captured by such modern spiritual teachers as Sri Nisargadatta Maharaj, Sri Aurobindo and Sri Sri Anandamurti, also known as P.R. Sarkar. Sri Nisargadatta advocated discovery of the real self. By establishing oneself (as jiva-atma, spiritual soul) in the earnestness of spiritual pursuits, it is possible to transcend the temporal self ("aham-kara" - "I am doer", false ego), limited by desires, fears, memories and mental constructs, and gain blissful immersion from material world (brahmanda, mahat-tattva) into the ocean of the pure consciousness (brahma-jyoti or rays) of God (or Absolute Truth, known in vedanta as Brahman and in Srimad Bhagavatam as Paramatma, Bhagavan, Vishnu, Narayana and Krishna). Theories on Idealism such as theory of Microvitum have been developed by P.R. Sarkar and his disciple Sohail Inayatullah.
^Krishnananda, Swami. Daily Invocations. Divine Life Society, The Purusha Sukta, Verses 4-5.