FAST-DS: Pay fee and gain immunity from harsher Black Money Act

The scheme's key drawback is the low monetary thresholds of Rs 1 crore and Rs 5 crore, which limit participation

The Union Budget 2026 has proposed the Foreign Assets of Small Taxpayers – Disclosure Scheme (FAST–DS), 2026, a one-time amnesty window for small taxpayers to regularise undisclosed foreign assets and foreign-sourced income relating to past years.

 

What the scheme offers

 

FAST–DS is a one-time, time-bound amnesty initiative that allows eligible taxpayers to voluntarily declare previously unreported foreign assets and foreign-sourced income from past years. “By making a prescribed payment, eligible taxpayers can regularise such disclosures and obtain immunity from further tax, penalty, and prosecution under the Black Money law, subject to specified conditions and thresholds,” says Shubham Jain, director, SVAS Business Advisors.

 

Who can use it, who cannot

 

The scheme covers individuals who were residents in the year in which the undisclosed asset or income arose. It also includes those who are non-residents currently but were residents when they acquired the asset. “It covers cases where the taxpayer did not file a return, filed a return but failed to disclose foreign assets or income, or where such assets or income were not assessed earlier,” says Jain.

 

However, the scheme is limited to small taxpayers and applies only within specified monetary caps on undisclosed foreign assets and income. “Taxpayers exceeding these thresholds are not eligible to avail of the scheme,” says Aarti Raote, partner, Deloitte India.

 

What taxpayers can disclose

 

FAST–DS allows disclosure of undisclosed foreign assets such as overseas immovable property or investments held directly or as a beneficial owner, where the source of investment is unexplained or unsatisfactorily explained. “It also covers undisclosed foreign income from overseas sources that was chargeable to tax but not reported, including interest, dividends, or rental income,” says Raote.

 

Cost, payment timeline, interest on delay

 

For cases where the combined value of undisclosed income and assets is up to Rs 1 crore, the payable amount includes 30 per cent tax on the asset value as of March 31, 2026, 30 per cent tax on the undisclosed income, and a penalty equal to 100 per cent of the tax computed. “In contrast, a flat fee of Rs 1 lakh applies to undisclosed foreign assets up to Rs 5 crore if they were acquired during non-resident status or funded from income already taxed in India but not disclosed after becoming a resident,” says Raote.

 

After a taxpayer files a declaration, the authority will electronically verify it and issue an order determining the payable amount within one month. Jain says taxpayers must pay within two months of receiving the order, with an option to seek a further two-month extension by paying interest at 1 per cent per month. The taxpayer must intimate payment details within this period.

 

Procedure and limitations

 

Once a declaration is filed, the authority will verify it electronically and issue an order determining the amount payable within one month.

 

Jain says payment must be made within two months of receiving the order, with a further two-month extension allowed on payment of interest at 1 per cent per month. The payment details must be intimated within this period. Once paid, the declaration is final—no revision, set-off, or appeal is permitted. Any amount paid is final and non-refundable.

 

Who benefits?

 

FAST–DS applies to Indian resident taxpayers—resident and ordinarily resident individuals, as well as other resident assessees such as companies and firms—whose undisclosed foreign income or assets fall within the prescribed limits and were not disclosed in earlier returns.

 

“Assets or income representing proceeds of crime, cases with proceedings initiated or pending under the PMLA, 2002, and matters where assessments are already completed under the Black Money Act, 2015, are excluded,” says Sandeep Jhunjhunwala, partner, Nangia Global.

 

Raote adds that these provisions will also not apply to cases where assessment is pending under the Black Money Act.

 

Pros and cons

 

Tax experts say the scheme is beneficial as it provides immunity from penalty and prosecution. “Upon payment of the prescribed tax and fee, the taxpayer is granted immunity from any further tax, penalty, or prosecution under the Black Money Act,” says Rupali Singhania, founder, Areete Consultants.

 

The main drawback is the relatively low monetary thresholds of Rs 1 crore and Rs 5 crore, which limit its reach. “However, the government may consider raising these limits in the future to encourage wider participation,” says Jhunjhunwala.

 

What taxpayers should do

 

Eligible resident taxpayers with undisclosed foreign income or assets should consider availing the scheme, as it offers a lower tax outgo than that under the existing provisions of the Income-tax Act and the Black Money Act.

 

“Prospective applicants should consult qualified tax professionals to assess eligibility and tax implications, ensure complete disclosure of all undisclosed holdings, and avoid piecemeal reporting. Participation also eliminates the risk of prosecution and imprisonment associated with wilful non-disclosure,” says Jhunjhunwala. 

Black Money Act: Tax, penalties and prosecution  > 30 per cent tax on undisclosed item  > Penalty up to three times tax due; effectively up to 90 per cent of  value, over and above 30 per cent tax  > Non-disclosure of foreign assets exceeding Rs 20 lakh: Rs 10 lakh penalty, even if unintentional  > Aggregate non-disclosure up to Rs 20 lakh in a financial year: no penalty or prosecution, subject to conditions; foreign immovable property excluded from threshold  > Wilful non-disclosure in ITR by resident taxpayer: rigorous imprisonment six months to seven years, plus fine

 

The writer is a Delhi-based independent journalist.