Government Launches Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS) to Disclose Undisclosed Foreign Assets

Government Launches Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS) to Disclose Undisclosed Foreign Assets

Introduction

• New Scheme: The Central Government has launched the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS). It’s a one-time scheme for eligible taxpayers who hadn’t declared some foreign assets or foreign income earlier. The scheme is governed by Chapter IV, Sections 130 to 144 of Finance Act, 2026 read with Foreign Assets of Small Taxpayers–Disclosure Scheme Rules, 2026.
• Status: up to date The scheme began on 16 August 2026 and taxpayers are allowed to make their declarations up to 31 December 2026. No declaration can be made under the scheme after this date.
• Main Purpose: The main aim of the scheme is to give small taxpayers a chance to correct mistakes or failures in reporting their foreign assets or income. It allows them to bring such assets into the proper tax system without facing all the penalties and other legal action that may otherwise apply.
• Target Group: The scheme is mainly useful for people such as students, young professionals, technology workers and non-resident Indians who may have owned or received foreign assets but did not properly report them in their Indian income-tax returns.

What is the New Scheme?

• One-Off Opportunity: FAST-DS is a voluntary one-off disclosure scheme. This provides an opportunity for certain eligible taxpayers to voluntarily come forward and report certain foreign assets and foreign income that went unreported.
• Legal Framework: The scheme has been brought under Chapter IV of the Finance Act, 2026, comprising Sections 130 to 144. The Central Board of Direct Taxes (CBDT) has also issued detailed rules on functioning of the scheme.
• Voluntary Compliance: The taxpayers may voluntarily come forward and disclose the details of foreign assets or income involved and pay the required tax or fee. They will not have to wait for the tax department to find the mistake or for them to find the missing information.

Who Can Benefit?

• Eligible Residents : The scheme is open to residents of India who are or were residents of India at the time when the foreign income was earned or the foreign asset was acquired, if they meet all the conditions specified under the law.
• Non Residents: Some people who are currently non-residents may also use the scheme for foreign assets acquired during an earlier period when they were resident of India, provided they meet the other conditions.
• RNOR Cases: In certain cases, even Resident but Not Ordinarily Resident (RNOR) individuals can be included under the scheme as well. It largely depends on whether they were residents when they acquired the foreign asset or earned the foreign income.
• Small Taxpayers: The scheme has mainly been made for taxpayers with relatively small foreign assets or foreign income. It is not mainly aimed at people who have very large amounts of undisclosed wealth outside India.

Two Categories of Disclosure

• Undisclosed Income: The first category is foreign assets or foreign income which has not been declared or offered to tax earlier. The total value of the relevant undisclosed foreign asset or income should be within the prescribed limit of Rs 1 crore under the scheme.
• Already Taxed Assets: The second category includes foreign assets up to ₹5 crore where the money used to buy the asset had already been taxed. In such cases the problem is mainly that the foreign asset was not properly reported on the taxpayer’s income tax return.
• Separate Treatment: The two categories have separate payment rules. The first category deals with foreign income or assets that were not properly taxed earlier, while the second category mainly deals with assets that were bought from income that had already been taxed but were not reported in the tax return.

Tax and Payment Rules

• Thirty Percent Tax: If the foreign asset or foreign income being declared falls under the first category, then the taxpayer shall be liable to pay tax @ 30% on the value of the asset or income.
• Additional Amount: In addition to the 30% tax, the taxpayer has to pay an additional amount equal to 100% of the tax. Therefore the total payment in this category is effectively 60% of the value in question.
• One Lakh Fee: The taxpayer can disclose foreign assets of up to 5 crore acquired from income that had already been taxed, or that fall under the second category, by paying a one-time fee of 1 lakh.

Foreign Assets Covered

• Immovable Property: This might include foreign immovable property such as houses, flats, land and other eligible property situated outside India, if such assets were not adequately disclosed to Indian tax authorities.
• Foreign financial assets: The scheme also covers foreign financial assets, such as shares, securities and certain interests in foreign companies or entities, if they meet the conditions specified in the law.
• Valuable Assets: The scheme also covers valuable assets outside India including jewellery, bullion, works of art, archaeological collections and other specified valuable items.
• Foreign Income: If the income is subject to the limitations and conditions of FAST-DS, taxpayers may also report certain foreign income that has not been reported or offered to tax before.

Valuation of Assets

• Fixed Date: The value of assets under FAST-DS is to be worked out with reference to March 31, 2025. This date has been fixed as the valuation date of the scheme.
• Market Value: The government has provided different means for ascertaining the correct market value of different kinds of foreign assets. This implies that taxpayers cannot simply select any value they want for the asset when making the declaration.
• Valuation of Jewellery: Bullion, jewellery and precious stones have to be valued as per the applicable market rates and the valuation methods prescribed under the scheme.
• Valuation of securities: Normally the quoted securities are valued at the prices quoted on the relevant stock exchanges. Unquoted shares and other securities shall be valued in accordance with the methods specified in the rules.
• Property Valuation: Foreign immovable property has to be valued on the basis of its market value and the prescribed rules. Taxpayers may also need suitable documents to support the value mentioned in their declaration.

Deadline and Filing

• Opening date: FAST-DS was implemented on August 16, 2026. Taxpayers who are eligible to use the scheme may file their declarations as per the rules notified as on this date.
• Deadline for Filing: The last day to file a declaration is December 31, 2026. “The government has been very clear that no more declarations can be submitted under this program after this date.
• Valuation date: Although taxpayers are allowed to make their declarations up until 31 December, the value of the relevant assets has to be determined at the prescribed valuation date, i.e., 31 March 2026.
• Form of Declaration: Eligible taxpayers shall submit declaration in the prescribed manner. The declaration is made on Form 1, the other prescribed forms being used for later stages of processing.

Benefits for Taxpayers

• Penalty Relief: A taxpayer who makes a valid declaration and meets all payment and other requirements applicable to the declaration may be relieved of certain penalties concerning the foreign asset or income that is the subject of the declaration.
• Prosecution Relief: The scheme can also offer protection from prosecution for the foreign income or asset declared under FAST-DS, provided the taxpayer meets all conditions laid down under the law.
• Reduction of Litigation: The scheme would provide an opportunity to the taxpayers to voluntarily correct their earlier reporting mistakes which would help in reducing tax disputes and avoid unnecessary litigation between the taxpayers and the tax department.
• Compliance Opportunity: The scheme provides eligible taxpayers with the opportunity to correct a previous position on reporting of foreign assets. It can also help them follow Indian tax rules properly in the future and keep their foreign assets and income properly reported.

Government’s Wider Approach

• Tax Transparency: FAST-DS is part of the government’s wider effort to increase transparency around foreign assets and foreign income. “The government’s priority is to make sure that unreported offshore assets are properly brought into the tax system.”
• Information sharing: Indian tax authorities are receiving increasing information on foreign bank accounts, financial assets and other overseas holdings as a consequence of international information sharing agreements. This has led to greater taxpayer concern about the proper reporting of foreign assets.
• Voluntary Compliance: The government is not just relying on tough enforcement. This program enables eligible taxpayers to voluntarily disclose their foreign assets, pay the required tax and fee and avail of the specified benefits and protection under this scheme.

Important Precautions

• Check Returns: Those who might have held foreign bank accounts, investments, property or other overseas assets should carefully check their earlier income-tax returns. They should check that all foreign assets and income were properly declared at the relevant time.
• Verify Documents: Taxpayers should retain important documents pertaining to their foreign assets. These could be papers showing how the asset was acquired, who owns it, its value and the source of the money used to purchase it.
• Check Eligibility : All foreign assets or all tax payers will not get automatic eligibility for FAST-DS. Taxpayers should first determine whether their particular case falls under the categories, value limits and other conditions specified under the scheme.
• Meet Deadline: Eligible taxpayers who want to use the scheme must complete the required declaration and payment process by December 31, 2026. This is important because FAST-DS is a time-bound, one-time opportunity and the declaration window will not remain open after the deadline.

Important Questions

1. What is the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026, and why has the government introduced it?
2. Who is eligible to make a declaration under the FAST-DS scheme?
3. What are the ₹1 crore and ₹5 crore limits under the two categories of the scheme?
4. How much tax or fee does a taxpayer have to pay for declaring an undisclosed foreign asset or income?
5. What are the deadline, valuation date and major benefits available to taxpayers under FAST-DS?

Conclusion

The new scheme gives eligible small taxpayers a limited opportunity to correct past foreign-asset reporting failures. With the deadline set for December 31, 2026, the government is seeking to combine tax compliance with a more facilitative approach for genuine or inadvertent omissions. The scheme can help taxpayers regularise their foreign holdings while also helping the government bring unreported overseas assets and income into the formal tax system.