Undisclosed foreign assets? How FAST-DS 2026 declaration can help taxpayers

The one-time scheme lets eligible taxpayers regularise certain past non-disclosures by paying a prescribed tax or fee and seeking immunity under the Black Money Act

Taxpayers with undisclosed foreign assets or income now have a one-time window to regularise past non-compliance under the government’s Foreign Assets of Small Taxpayers Disclosure Scheme, 2026 (FAST-DS). The scheme allows eligible taxpayers to disclose foreign assets or income up to prescribed limits, pay a tax or fee, and avoid harsher consequences under the Black Money Act.

 

What is FAST-DS 2026 and why did the government introduce it?

 

According to tax experts, FAST-DS is part of the government’s broader strategy to encourage voluntary compliance and greater transparency in the disclosure of foreign income and assets. The government introduced the scheme in the Union Budget 2026, and it came into force on August 16, 2026. The scheme offers small taxpayers a one-time opportunity to regularise certain past non-disclosures, particularly those that could otherwise attract stringent provisions under the Black Money Act, 2015.

 

“The move follows the government’s earlier disclosure and dispute-resolution schemes, which encouraged taxpayers to come forward and settle past non-compliance. Through FAST-DS, the government seeks to improve reporting, widen the tax base and bring previously undisclosed foreign income and assets into the formal tax system,” says Abheet Sachdeva, partner, Nangia Global.

 

FAST-DS categories, limits, and what you pay

 

The scheme covers two distinct categories.

 

Category 1 covers undisclosed foreign assets or income up to ₹1 crore. Taxpayers must pay tax at 30 per cent plus an additional 100 per cent of the tax, resulting in an effective levy of 60 per cent. For example, a disclosure of ₹80 lakh would attract a payment of ₹48 lakh.

 

Category 2 covers specified foreign assets up to ₹5 crore, where the underlying income has already been taxed in India or the taxpayer acquired the asset while they were a non-resident but did not disclose it after becoming a resident. A flat fee of ₹1 lakh is payable for such assets.

 

“The scheme, however, does not clearly address partial disclosures. For instance, if a taxpayer has ₹1.5 crore in undisclosed assets but declares only ₹1 crore, it remains unclear whether the declared amount gets protection while the balance remains exposed to the Black Money Act, or whether the incomplete disclosure could invalidate the benefit altogether. A clarification from the government would help resolve this issue,” says Sachdeva.

 

Key benefits of the scheme

 

FAST-DS gives eligible taxpayers a one-time opportunity to regularise certain past non-disclosures of foreign income and assets. It could be particularly relevant for young professionals with unreported overseas investments or employee stock option plans (ESOPs), as well as returning non-resident Indians (NRIs) who continue to hold foreign bank accounts or investments.

 

“The key benefit is immunity from further tax, penalty and prosecution under the Black Money Act, 2015, in respect of income or assets validly disclosed under the scheme. This offers taxpayers a defined route to resolve past non-compliance rather than risk potentially harsher consequences if the non-disclosure is detected later,” says Vishwas Panjiar, managing partner, SVAS Business Advisors LLP.

 

Costs and downsides of the scheme

 

The cost depends on the nature of the non-disclosure. Where foreign income or assets were not previously offered to tax and the aggregate value does not exceed ₹1 crore, taxpayers must pay tax at 30 per cent plus an additional amount equal to the tax, resulting in an effective cost of 60 per cent. For example, an undisclosed foreign asset of ₹60 lakh and income of ₹20 lakh would attract a total payment of ₹48 lakh.

 

“Where the underlying income has already been taxed, or the asset was acquired while the taxpayer was a non-resident but was not disclosed in the relevant return schedule, a flat fee of ₹1 lakh is payable, provided the value of the foreign assets does not exceed ₹5 crore,” says Panjiar.

 

When can you make a declaration?

 

The scheme broadly covers two situations: Undisclosed foreign income or assets up to ₹1 crore, and specified foreign assets up to ₹5 crore where the underlying income has already been taxed or the asset was acquired while the taxpayer was a non-resident but not disclosed in the return.

 

“It applies where a taxpayer failed to file a return, omitted the relevant income or asset from a filed return, or where the income or asset escaped assessment. Taxpayers can file declarations electronically in Form 1 between August 16 and December 31, 2026,” says Panjiar.

 

For returning NRIs and others with legacy overseas assets, the key consideration is whether to regularise the non-disclosure now or risk detection and possibly harsher consequences later.

 

When is FAST-DS unavailable?

 

The scheme does not apply to two categories. The first is income or assets that directly or indirectly represent proceeds of crime, where proceedings under the Prevention of Money-laundering Act, 2002, have been initiated or are pending. The second is income or assets relating to an assessment year for which assessment proceedings under the Black Money Act, 2015, have already been completed.

 

“A declaration is also invalid if filed after December 31, 2026, if the taxpayer does not meet the applicable residency conditions, or if the aggregate value exceeds the ₹1 crore or ₹5 crore threshold, as applicable. However, pending assessment proceedings under the Income-tax Act or Black Money Act do not, by themselves, disqualify a taxpayer. A valid declaration will be considered by the Assessing Officer while completing the assessment,” says Richa Sawhney, partner - tax, Grant Thornton Bharat.

 

Who is eligible?

 

A taxpayer who was resident in India under Section 6 of the Income-tax Act, 1961, in the relevant previous year can make a FAST-DS declaration, subject to the scheme’s other conditions. A person who is currently a non-resident or resident but not ordinarily resident (RNOR) can also qualify if they were resident in India in the year to which the undisclosed foreign income relates or in the year the foreign asset was acquired.

 

“The scheme covers cases where the taxpayer failed to file a return, failed to disclose the relevant foreign income or asset in a return filed before FAST-DS commenced, or had income or an asset that escaped assessment under Section 147 of the Income-tax Act,” says Sawhney.

 

What happens after filing?

 

The declaration must be filed electronically in Form 1. After verification, the tax authority will issue Form 2 specifying the amount payable within one month from the end of the month in which the declaration is filed. The taxpayer must make the payment within two months from the end of the month in which the order is received and submit proof of payment electronically in Form 3.

 

“Once the taxpayer pays the prescribed amount, the taxpayer gets immunity from further tax, penalty and prosecution under the Black Money Act, 2015, for the disclosed income or asset. The declared income or investment is also excluded from total income under the Income-tax Act and Black Money Act,” says Rupali Singhania, founder, Areete Consultants.

 

(The writer is a Delhi-based independent journalist)

 

FAST-DS: Key Dos and Don’ts

 

What you should do

 

Check the correct category, eligibility and applicable threshold

Verify residential status and eligibility conditions

File Form 1 by December 31, 2026

Value foreign assets as at March 31, 2026, as prescribed

Pay the amount specified in Form 2 within the stipulated timeline and file Form 3 with proof of payment

 

What you shouldn't do

 

Do not suppress or misstate facts, as this could invalidate the declaration

Do not expect revision, rectification, set-off or relief in related proceedings for the declared income, assets or amounts paid

 

(Source: Grant Thornton Bharat)