The Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS), 2026, officially commenced on August 16, 2026. This initiative provides a crucial, one-time window for eligible taxpayers to disclose certain undisclosed foreign assets and income. The voluntary scheme is set to conclude on December 31, 2026, after which no further declarations under this program will be accepted.
Who Can Utilize the FAST-DS Scheme?
The Foreign Assets Disclosure Scheme is primarily available to taxpayers who were residents of India during the relevant previous year. It also extends its coverage to certain non-residents and individuals classified as Resident But Not Ordinarily Resident (RNOR) taxpayers. Eligibility for these groups applies if they were residents of India in the year to which the undisclosed foreign income pertains, or in the year when the foreign asset was originally acquired.
A declaration can be filed in various scenarios, including:
- Failure to file an income-tax return.
- Failure to disclose a foreign asset or income in a previously filed return.
- Situations where an asset or income has escaped assessment under applicable provisions.
The scheme permits declarations for any previous year concerning assets or income covered by specified provisions, provided they adhere to applicable monetary thresholds and other stipulated conditions.
What Can Taxpayers Declare Under the Scheme?
FAST-DS encompasses two primary categories for declaration:
- Undisclosed Foreign Assets/Income (Category 1): This covers undisclosed assets located outside India or undisclosed foreign income that was not previously offered for taxation. The aggregate value of such undisclosed foreign assets and foreign income must not exceed ₹1 crore.
- Undisclosed Assets Already Taxed/Acquired as Non-Resident (Category 2): This category includes foreign assets that were either already offered for taxation or acquired when the taxpayer was a non-resident, but were not properly disclosed in the relevant schedule of the income-tax return. The aggregate value of assets under this category must not exceed ₹5 crore.
Understanding the Payment Structure
The financial implications for taxpayers vary depending on the category of declaration:
- For Category 1 (Undisclosed Foreign Assets/Income up to ₹1 crore): Taxpayers are required to pay 30% of the value of the undisclosed foreign asset or income, along with an additional amount equivalent to the tax payable. This effectively brings the total payable to 60% of the declared value or income.
- For Category 2 (Foreign Assets Already Taxed/Acquired as Non-Resident up to ₹5 crore): Taxpayers can make a declaration by paying a flat fee of ₹1 lakh, provided the aggregate value of the foreign assets does not exceed ₹5 crore.
How Foreign Assets Are Valued
The designated valuation date under FAST-DS is March 31, 2026. For most assets, the fair market value is generally considered the higher of the acquisition cost or the price the asset would typically fetch in the open market on the valuation date. If a specified valuation is not conducted, the indexed cost of acquisition is deemed to be the fair market value. Specific valuation rules apply to different asset types, including foreign bank accounts, shares, securities, jewellery, and overseas immovable property. For foreign bank accounts, valuation is typically based on deposits made from the account's opening date up to March 31, 2026, with certain exclusions like deposits from withdrawals from the same account to prevent double-counting.
Process for Filing a Declaration
Declarations under the Foreign Assets Disclosure Scheme must be filed electronically using Form 1, submitted to the prescribed income-tax authority. Taxpayers are required to upload supporting documents for asset acquisition or income generation, along with valuation reports where applicable. Following verification, the authority will communicate the amount payable through Form 2. Generally, taxpayers have two months from the end of the month in which the order is received to make the payment. An additional period of up to two months may be granted, subject to simple interest of 1% for every month or part of a month of delay.
A valid declaration, followed by timely payment, grants immunity from further tax, penalties, and prosecution under the Black Money Act concerning the declared income or asset.