Introduction
In the Union Budget 2026, the Government of India introduced the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST-DS), 2026. This one-time compliance window is a significant “reset” button for resident individuals who may have inadvertently failed to report foreign income or assets in their previous tax filings.
For years, the stringent provisions of the Black Money Act, 2015 loomed over small taxpayers, where even a minor omission in the Foreign Asset (FA) schedule could lead to a flat penalty of ₹10 lakh and potential prosecution. Recognizing that many such lapses like a forgotten bank account from student days or foreign company RSUs are unintentional, FAST-DS 2026 offers a path to regularize these holdings with immunity and at a much lower cost.
Frequently Asked Questions (FAQ)
Q.1 What is the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026?
Ans: The Scheme provides a one-time opportunity to eligible taxpayers to disclose specified foreign income and assets either not taxed or not reported in the return of income, on payment of tax or fee, with immunity from further tax, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.
Q.2 Who is eligible to make a declaration under this Scheme?
Ans: Any person who is or was a resident in India in the relevant period and who satisfies the conditions specified in the Scheme may make a declaration. This includes persons who are presently non-resident or not ordinarily resident but were resident in India when the undisclosed foreign income accrued or when the foreign asset was acquired.
Q.3 Who are the people who can take advantage of this scheme?
Ans: Many taxpayers can take advantage of this scheme, including but not limited to –
- employees of multinational technology companies receiving ESOPs or RSUs from foreign employers who have not reported such assets;
- former students retaining dormant or low-balance foreign bank accounts after completion of studies abroad;
- returning non-residents with undisclosed foreign savings or insurance policies; and
- mission employees or other personnel on deputation abroad.
Q.4 What types of income or assets can be disclosed under the Scheme?
Ans: The Scheme covers—
(a) undisclosed foreign income;
(b) undisclosed assets located outside India; and
(c) specified foreign assets acquired from foreign income when assessee was a non-resident or from income already offered to tax in India, which have not been reported in the relevant Schedule of the return of income.
Q.5 What is the “undisclosed foreign income” that can be declared under the Scheme?
Ans: It is defined as the total amount of income of an assessee from a source located outside India which should have been taxed in India but has not been offered to tax.
Q.6 What is the “undisclosed assets located outside India” that can be declared?
Ans: It is defined as an asset (including financial interest in any entity) located outside India, held by the assessee in his name or as a beneficial owner, but he has no explanation about the source of investment in such asset.
Q.7 What are the monetary limits to be eligible under the Scheme?
Ans: For “undisclosed assets located outside India” or “undisclosed foreign income”, the Scheme applies where the aggregate value does not exceed ₹ 1 Crore as on 31st march 2026.
Q.8 What are the monetary limits under this scheme for foreign assets that were taxed but not reported?
Ans: For foreign assets acquired from disclosed income or during status as a non-resident, the value of the asset must not exceed ₹ 5 Crore as on 31st March 2026.
Q.9 What is the amount payable where “undisclosed assets located outside India” or “undisclosed foreign income” are declared?
Ans: The declarant is required to pay tax at the rate of 30 per cent of the value of the undisclosed foreign asset as on 31 March 2026 or of the undisclosed foreign income, as the case may be, together with an additional amount equal to 100 per cent of such tax. The total amount payable will be 60% of the value of the asset or foreign income, as the case may be.
Q.10 What is the amount payable where the foreign asset is explained but not reported?
Ans: Where the foreign asset was acquired during non-resident status or from income already offered to tax in India but was not disclosed in the relevant return schedules, a flat fee of ₹ 1 Lakh is payable, subject to the value threshold.
Q.11 If there is a non-declaration of same asset in multiple years will the fee of Rs 1 lakh be chargeable for all the years or one year only?
Ans: If the asset is same, then only one time fee would be chargeable and would be applicable for the first year of non-disclosure. Thereafter it would be deemed that the asset remains disclosed. However, if there are assets that were acquired in multiple years, then fee would be chargeable for corresponding first years when the asset was undisclosed.
Q.12 What is the manner of making a declaration under the Scheme?
Ans: A declaration under the Scheme shall be made electronically in the prescribed form and verified in the prescribed manner, within the period notified by the Central Government.
Q.13 How is the amount payable under the Scheme determined?
Ans: After electronic verification of eligibility and the declaration, the prescribed Income-tax authority shall communicate the amount payable by way of an order within one month from the end of the month in which the declaration is furnished.
Q.14 What is the time limit for payment of the amount determined?
Ans: The declarant is required to pay the amount determined within two months from the end of the month in which the order is received. A further extension of two months is permitted, and no extension beyond this period is allowed.
Q.15 Does the Scheme grant immunity from penalty and prosecution?
Ans: Yes. A declarant who makes a valid declaration and pays the prescribed amount shall be granted immunity from levy of tax, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in respect of the income or asset so declared.
Q.16 Are there any exclusions where the Scheme shall not apply?
Ans: Yes. The Scheme does not apply to income or assets representing proceeds of crime under the Prevention of Money Laundering Act, 2002, or to cases where assessment proceedings under the Black Money Act have already been completed.
Q.17 How are pending assessment proceedings affected?
Ans: Where assessment proceedings under the Income-tax Act, 2025 are pending in respect of the declared income or asset, the Assessing Officer shall take the declaration into account while finalizing such proceedings.
Q.18 How is the value of an undisclosed foreign asset to be determined for the purposes of the Scheme?
Ans: The value of an undisclosed foreign asset shall be determined in accordance with the valuation rules prescribed under the Scheme, having regard to the nature of the asset and the relevant valuation date.
Q.19 How will cases of misrepresentation or suppression of facts be dealt with?
Ans: Where a declaration is found to be false or contains material misrepresentation or suppression of facts, the declaration shall be void and the provisions of the applicable law shall apply as if no declaration had been made.
Q.20 Who is the competent authority for administering the Scheme?
Ans: The Scheme shall be administered by such income-tax authorities as may be notified by the Central Government. 16
Q.21 From when will the Scheme come into force?
Ans: The Scheme shall come into force on such date as may be notified by the Central Government in the Official Gazette.
Conclusion
The FAST-DS 2026 is a welcome shift from “aggressive enforcement” to “facilitated compliance.” This scheme provides a golden window to help clients “clean up” their balance sheets without the fear of the draconian penalties typical of the Black Money Act. Given the increasing efficiency of the Automatic Exchange of Information (AEOI) between countries, this window should be viewed as a final opportunity to regularize global holdings before the tax department initiates its own inquiries.
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