The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS 2026) is proposed under the Finance Bill, 2026 to facilitate voluntary compliance for resident taxpayers with undisclosed foreign income or assets arising from legacy or inadvertent non-disclosures. The scheme responds to widespread non-compliance identified through the Automatic Exchange of Information framework, particularly involving small taxpayers with low-value or dormant foreign accounts, ESOPs or RSUs from overseas employment, savings or insurance policies of returning non-residents, and assets held during foreign deputation. FAST-DS 2026 provides a time-bound window for declaration of such foreign assets or income, subject to payment of tax, penalty, or fee as prescribed, and grants limited immunity from penalty and prosecution under the Black Money Act for matters covered by the declaration. Declarations will be electronically verified, with defined payment timelines and issuance of certificates. Amounts paid will be non-refundable, and relief will not extend to cases involving proceeds of crime or ongoing prosecution. The scheme will come into force from a date to be notified by the Central Government.
Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS 2026)
The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 was enacted to address the issue of undisclosed foreign income and assets held by resident taxpayers. At the time of its introduction, a one-time compliance window was provided from 1 July 2015 to 30 September 2015 to enable voluntary declaration of undisclosed foreign assets acquired up to 31 March 2015, subject to payment of tax and penalty.
It has been observed that non-compliance is particularly prevalent in cases involving legacy or inadvertent non-disclosures for small taxpayers, including holdings arising from foreign employment benefits such as ESOPs or RSUs, dormant or low-value foreign bank accounts of former students, savings or insurance policies of returning non-residents, and assets held by individuals on overseas deputation. Further, information received under the Automatic Exchange of Information framework indicates non-disclosure of foreign financial assets by a significant number of PAN holders.
In order to facilitate voluntary compliance and enable resolution of such legacy cases of small taxpayers, it is proposed to introduce a time-bound scheme for declaration of foreign assets and foreign-sourced income, with payment of tax or fee based on the nature and source of acquisition and grant of limited immunity from penalty and prosecution under the Black Money Act in respect of matters covered by the declaration. Cases involving prosecution or proceeds of crime are proposed to be excluded
The proposed scheme shall form part of the Finance Bill, 2026 and shall come into force from the date to be notified by the Central Government.
[Clauses 114 to 128]
Extract of Relevant Clauses of Finance Bill, 2026
Clauses 114 to 128 of the Bill seeks to insert a new Chapter relating to the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026.
The Chapter, inter alia, provides––
a. the short title and commencement of the Scheme and the date from which it shall come into force;
b. the definitions of certain expressions relating to “assessee”, “assessment”, “assessment year”, “Board”, “declarant”, “declaration”, “last date”, “previous year” “prescribed” “undisclosed asset located outside India”, “undisclosed foreign income” and “value of the asset”;
c. the provisions relating to eligibility and filing of declaration by an assessee in respect of undisclosed foreign income or undisclosed assets located outside India;
d. the provisions relating to the amount payable by the declarant, including the rate of tax, penalty or fee payable, subject to specified monetary thresholds and conditions;
e. the provisions relating to the manner, form and verification of the declaration and the circumstances in which such declaration shall be deemed invalid;
f. the provisions relating to electronic verification of declarations, determination of the amount payable, time limits for payment, levy of interest for delayed payment and issuance of certificate evidencing payment;
g. the provisions relating to non-inclusion of income or assets declared under the Scheme in the total income of the declarant and the effect of such declaration on pending assessment proceedings;
h. the provisions relating to non-refund of any amount paid under the Scheme and the bar on claiming rectification, revision, set-off or relief in respect of completed assessments;
i. the provisions relating to grant of immunity from levy of tax, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, subject to fulfilment of the conditions of the Scheme;
j. the provisions relating to cases to which the Scheme shall not apply, including cases involving proceeds of crime or completed assessments under the Prevention of Money-laundering Act, 2002 and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015;
k. the provisions relating to the power of the Central Board of Direct Taxes to issue directions and grant relaxation in public interest, the power of the Central Government to remove difficulties and the power to make rules for carrying out the provisions of the Scheme.
This Chapter will take effect from such date as the Central Government may notify in the Official Gazette.
Extract of Relevant Amendment Proposed by Finance Bill, 2026
114. Short title and commencement.
(1) This Scheme may be called the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
128. Power to remove difficulties.
(1) If any difficulty arises in giving effect to the provisions of this Scheme, the Central Government may, by order, not inconsistent with the provisions of this Scheme, remove the difficulty.
(2) No order under sub-section (1) shall be made after the expiry of period of two years from the date on which provisions of this Scheme come into force.
(3) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before each House of Parliament.
