Summary: The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS/FADS 2026) is a time-bound statutory route under Chapter IV of the Finance Act, 2026 for eligible taxpayers to regularise specified historical omissions involving foreign assets or foreign income. The Income Tax Department has enabled Form 1 on the e-Filing portal, with declarations permitted from 16 August 2026 to 31 December 2026. The Scheme has two materially different routes. The first covers qualifying undisclosed foreign assets and/or undisclosed foreign income where the aggregate does not exceed ₹1 crore; the amount payable comprises 30% tax plus an additional amount equal to that tax, producing a 60% combined payment on the declared base. The second covers specified foreign assets acquired from income earned abroad while non-resident or from income already offered to Indian tax but omitted from the relevant return schedule, subject to an aggregate foreign-asset value not exceeding ₹5 crore; the fee is ₹1 lakh. Form 1 requires asset/income classification, valuation and supporting details. The Department issues Form 2 determining the amount payable; payment is made through ITNS 289 and intimated in Form 3; Form 4 certifies validity after prescribed compliance. The Scheme should not be confused with ordinary Schedule FA reporting for current returns. Eligibility, residential status in the relevant acquisition/income year, source of funds, exclusions, valuation and pending proceedings must be checked before choosing a category.
- FAST-DS 2026 Is a One-Time Statutory Disclosure Window
- Who Can Potentially Use the Scheme
- Two Declaration Routes: Do Not Mix the ₹1 Crore and ₹5 Crore Categories
- What Assets and Income Can Appear in Form 1
- Form 1 Filing Window and Portal Path
- Form 1 Structure and Supporting Evidence
- Valuation Date and Valuation Rules
- Forms 1 to 4: The Full Compliance Sequence
- ITNS 289 Payment: AY 2026-27 Is Pre-Filled
- FAST-DS Does Not Replace Schedule FA
- Black Money Act Consequences and Immunity
- Practical Pre-Filing Checklist
- Frequently Asked Questions
- Key Takeaways
FAST-DS 2026 Is a One-Time Statutory Disclosure Window
FAST-DS 2026 was introduced through Chapter IV of the Finance Act, 2026. CBDT subsequently notified the Foreign Assets of Small Taxpayers-Disclosure Scheme Rules, 2026 through Notification No. 114/2026, and the Income Tax Department has enabled the online filing process. The Scheme is not a general amnesty for every tax default and is not a replacement for filing the correct ITR.
TaxGuru has reproduced the Foreign Assets of Small Taxpayers-Disclosure Scheme Rules, 2026, including valuation rules and prescribed Forms 1 to 4. A separate FAST-DS detailed guide explains the distinction between unexplained foreign assets/income and assets whose source is explained but whose reporting was omitted.
Who Can Potentially Use the Scheme
The Department’s Form 1 manual states that the Scheme applies to a person who was resident in India in the relevant previous year, and can also cover a person who is currently non-resident or resident but not ordinarily resident where that person was resident in India in the relevant year to which the undisclosed foreign income relates or in the year in which the undisclosed foreign asset was acquired. The residential-status test is therefore historical and transaction-specific; current NRI status alone does not answer eligibility.
Before filing, the taxpayer should establish the acquisition year of each foreign asset, the source of funds, residential status in that year, whether related foreign income was chargeable in India, whether it was offered to tax, and whether the asset was disclosed in the applicable return schedule after the taxpayer became subject to such reporting.
Two Declaration Routes: Do Not Mix the ₹1 Crore and ₹5 Crore Categories
| Route | What it broadly covers | Monetary condition | Amount payable |
|---|---|---|---|
| Category 1 | Undisclosed foreign asset and/or undisclosed foreign income | Aggregate qualifying value/income not above ₹1 crore | 30% tax plus amount equal to 100% of that tax; combined 60% |
| Category 2 | Specified foreign asset acquired while non-resident from foreign income, or acquired from income already offered to Indian tax, but asset reporting was omitted | Aggregate value of qualifying foreign assets not above ₹5 crore | Flat fee of ₹1 lakh |
The second category is not a discounted route for unexplained money. Its premise is that the source is of the specified explained type but the foreign asset was not reported as required. Conversely, the first route deals with undisclosed foreign assets/income within its statutory ceiling and payment formula. Selecting a category requires evidence, not merely the lower payment outcome.
What Assets and Income Can Appear in Form 1
The Department’s Form 1 manual organises the annexures around foreign bank accounts, immovable property, jewellery, artistic work, shares and securities, other assets and, where applicable, foreign income. Common real-world cases can include legacy foreign bank accounts, overseas brokerage/custody accounts, shares received or purchased abroad, ESOP/RSU holdings, foreign property, insurance or investment interests and foreign-source income.
TaxGuru’s Schedule FA reporting guide for resident taxpayers explains the broader annual foreign-asset disclosure context. TaxGuru’s foreign-assets and notice guide also emphasises that discovery of a foreign asset does not by itself establish unexplained black money; source, ownership, residential status and reporting facts remain material.
Form 1 Filing Window and Portal Path
The Department’s user manual states that Form 1 declarations can be filed from 16 August 2026 through 31 December 2026. On the e-Filing portal, the navigation is e-File → Income Tax Forms → File Income Tax Forms → Forms as per Other Acts → Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (Form 1). A valid PAN registered on the portal and an e-verification method are prerequisites.
If a taxpayer files a fresh Form 1 after already filing one, the portal warns that the earlier filing becomes non-actionable and the newly filed declaration is treated as the operative filing with consequences attached to its filing date. This makes version control and professional review important before re-filing.
Form 1 Structure and Supporting Evidence
The Department describes eight functional tabs/parts covering basic information, type of asset/income, relevant annexures, categorised summary/amount payable and verification. The taxpayer selects the applicable type of omission and then enters asset-by-asset or income-source details in the enabled annexures.
Supporting documents can include passport information, foreign bank statements, broker statements, acquisition records, ESOP/RSU grant and vesting documents, property records, valuation reports and computations. The portal manual contemplates PDF/ZIP attachments within prescribed file limits. A taxpayer should preserve evidence of source as carefully as evidence of value because the distinction between Category 1 and Category 2 can depend on source and prior tax treatment.
Valuation Date and Valuation Rules
The notified Rules prescribe valuation methodology for different asset classes and use 31 March 2026 as the central valuation date for the Scheme where applicable. The method differs for bank accounts, quoted/unquoted securities, immovable property, jewellery, artistic work, partnership interests and other assets. Currency conversion rules also apply. A taxpayer should not simply use current market value on the date of filing or the original purchase price unless the Rule for that asset requires it.
Where a valuation report is required or relevant, the report and assumptions should be retained with the declaration working papers. The Rules also contain a tolerance/variance mechanism for specified valuation situations, but it should not be treated as permission to use an arbitrary figure.
Forms 1 to 4: The Full Compliance Sequence
| Form | Who acts | Purpose/timeline |
|---|---|---|
| Form 1 | Taxpayer | Declaration; filing window up to 31 December 2026 |
| Form 2 | Income Tax Department | Order determining amount payable; generally within one month from end of month of Form 1 |
| ITNS 289 + Form 3 | Taxpayer | Pay determined amount and intimate payment; Form 3 timeline linked to Form 2 |
| Form 4 | Income Tax Department | Certificate/order confirming validity after prescribed payment/compliance |
ITNS 289 Payment: AY 2026-27 Is Pre-Filled
The Income Tax Department’s FAST-DS payment FAQ states that ITNS 289 is the prescribed challan after a valid declaration and Form 2 determination. Assessment Year 2026-27 is pre-filled for Scheme payments irrespective of the historical year in which the foreign asset was acquired or foreign income arose. Corporate and non-corporate PANs use the specified major/minor heads.
The Department specifically cautions that a payment made under an incorrect minor head in ITNS 289 cannot be corrected or refunded through the Scheme process. The taxpayer should therefore match PAN category, challan head and Form 2 amount before payment. Payment evidence should be retained and correctly reported in Form 3.
FAST-DS Does Not Replace Schedule FA
FAST-DS addresses qualifying historical non-compliance. Schedule FA remains part of annual return reporting for taxpayers to whom it applies. TaxGuru’s FAST-DS and Schedule FA comparison guide explains that a taxpayer may need to address both the historical omission and correct current-year reporting.
A valid Scheme declaration should therefore be integrated into the taxpayer’s broader compliance file: current ITR disclosure, foreign-source income reporting, foreign tax credit documentation where relevant, AIS information and future Schedule FA reporting should be made consistent with the facts regularised.
Black Money Act Consequences and Immunity
The Scheme is significant because qualifying valid declarations and prescribed payment can provide statutory protection from further tax, penalty and prosecution under the Black Money Act in respect of matters covered by the declaration, subject to the Scheme’s conditions and exclusions. This protection should not be described as blanket immunity for unrelated assets, false statements, proceeds of crime or excluded proceedings.
TaxGuru’s analysis of Black Money Act and foreign assets explains the stringent background against which foreign-asset reporting operates. The Scheme should therefore be approached as a document-heavy statutory compliance exercise rather than as a simple portal form.
Practical Pre-Filing Checklist
- Prepare a year-wise inventory of every foreign account, security, ESOP/RSU, property and other foreign interest.
- Establish ownership/beneficial ownership and acquisition date.
- Determine residential status for the relevant acquisition/income year.
- Trace the source of investment and whether that income was already offered to Indian tax.
- Compare historical ITRs, Schedule FA/FSI/TR, Form 67 and AIS information.
- Classify each item into the correct statutory declaration route; do not choose by payment amount.
- Apply the notified valuation method and currency conversion rule for each asset.
- Check exclusions, pending proceedings and prosecution/proceeds-of-crime restrictions.
- Have Form 1 and supporting evidence professionally reviewed before e-verification.
- After Form 2, use the correct ITNS 289 heads and complete Form 3 within time.
Frequently Asked Questions
1. What is the last date for filing Form 1 under FAST-DS 2026?
The Income Tax Department’s manual states that the declaration window runs up to 31 December 2026.
2. Is the Scheme only for a person who is resident in India today?
No. The statutory eligibility test can also cover a current NR/RNOR who was resident in the relevant year of foreign income or acquisition, subject to the Scheme conditions.
3. Is the ₹1 crore category charged at 30% only?
No. It involves 30% tax plus an additional amount equal to 100% of that tax, resulting in a combined 60% payment on the declared base.
4. When does the ₹1 lakh fee route apply?
It applies to the specified Category 2 explained-source foreign assets, subject to the statutory conditions and ₹5 crore aggregate-value ceiling. It is not a general alternative for unexplained assets.
5. Does filing FAST-DS remove the need for Schedule FA?
No. Historical regularisation and current annual foreign-asset reporting are separate compliance questions.
6. Which challan is used for payment?
ITNS 289 is used after the Department determines the amount payable. AY 2026-27 is pre-filled for Scheme payments.
7. Can the taxpayer simply use current market value?
No. The notified Rules prescribe asset-specific valuation methods and the relevant valuation date/currency conversion rules.
8. Does a valid declaration provide blanket immunity for all foreign assets?
No. Protection is subject to statutory conditions and is limited to matters validly covered by the declaration; exclusions and unrelated matters remain outside it.
Key Takeaways
- FAST-DS 2026 Form 1 can be filed up to 31 December 2026.
- Category 1 has a ₹1 crore ceiling and combined 60% payment formula.
- Category 2 has a ₹5 crore asset-value ceiling and ₹1 lakh fee, but only for specified explained-source omissions.
- Historical residential status and source of acquisition are central eligibility facts.
- Valuation must follow the notified Rules, not an arbitrary current value.
- The process runs through Form 1, Form 2, ITNS 289/Form 3 and Form 4.
- FAST-DS does not replace current Schedule FA/foreign-income reporting.
- Scheme immunity is conditional and limited to matters validly declared.
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Disclaimer: This article is for general informational and educational purposes only and reflects the Finance Act, 2026, Foreign Assets of Small Taxpayers-Disclosure Scheme Rules, 2026, Income Tax Department Form 1/payment guidance and related material reviewed as on 7 October 2026. It is not legal, tax, valuation, FEMA, Black Money Act or personalised professional advice. FAST-DS eligibility, declaration category, monetary ceiling, residential status, source of acquisition, valuation, pending proceedings, exclusions, immunity and payment consequences depend on the taxpayer’s complete historical facts and documents. An incorrect declaration, valuation, challan head or assumption about immunity can have serious consequences. Readers should verify the notified Scheme/Rules, live e-Filing instructions and obtain case-specific professional advice before filing or paying. TaxGuru, its owners, management, editors, authors, employees and associated persons accept no responsibility or liability for any loss, tax, fee, penalty, prosecution exposure, damage, consequence, decision or action arising from reliance on or use of this article.
