The Income Tax Department is set to open a one-time disclosure window for certain taxpayers holding foreign assets or income that was not properly reported earlier. The Foreign Assets of Small Taxpayers-Disclosure Scheme (FAST-DS) will begin accepting declarations from August 16, 2026, and taxpayers will have until December 31, 2026, to come forward under the scheme. The Central Board of Direct Taxes (CBDT), while notifying the rules, said the scheme “enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee”.
The initiative was announced in the Union Budget 2026-27 to provide a compliance route for who may have failed to report certain overseas assets or income in their income-tax returns.
Who Can Use The FAST-DS Scheme?
The voluntary disclosure mechanism is primarily intended for small taxpayers. This includes categories such as students, young professionals, technology employees and relocated non-resident Indians (NRIs). The scheme is particularly relevant for taxpayers who have foreign assets or income that fall within the prescribed limits but were either not disclosed at all or were omitted from the relevant foreign-asset schedules in their income-tax returns.
The framework provides different thresholds depending on the nature of the disclosure. Taxpayers should determine which category their overseas asset or income falls under before submitting a declaration.
How Much Tax And Levy Will Taxpayers Have To Pay?
Those choosing to make a disclosure under FAST-DS will have to pay 30 per cent tax, along with an additional levy equivalent to the tax amount.
The valuation of assets covered by the declaration will be based on their fair market value as of March 31, 2026.
For instance, according to the CBDT’s FAQ, if an undisclosed foreign bank account is valued at Rs 60 lakh and undisclosed foreign income amounts to Rs 20 lakh, the aggregate tax payable would be Rs 48 lakh. This calculation highlights the financial implications of using the disclosure route and the importance of understanding the applicable rules before filing a declaration.
Two Categories Of Foreign Assets Covered
Broadly, FAST-DS allows declarations under two categories. The first covers undisclosed foreign assets or income. This applies where a taxpayer has an asset located outside India that has not been disclosed or has foreign income that was not offered to tax. The combined value of such undisclosed assets should not exceed Rs 1 crore.
The second category relates to foreign assets that were not reported in the income-tax return. These could include assets on which the relevant income had already been offered to tax or assets acquired during a period when the taxpayer was a non-resident, but which were not reported in the applicable ITR schedule.
For this category, the aggregate value of the assets should not exceed Rs 5 crore. A Rs 1 lakh fee will apply to declarations made under this provision.
Why The Scheme Could Matter To Small Taxpayers
FAST-DS provides a specific opportunity for eligible taxpayers to correct past non-disclosures involving overseas assets or income.
One of the key attractions of the scheme is the protection it provides to taxpayers who make eligible declarations and meet the prescribed payment requirements. The scheme offers immunity from further tax, penalty and prosecution under the Black Money Act, 2015, for the foreign income or assets disclosed through the mechanism.
This could be particularly significant for individuals who may have inadvertently failed to report overseas holdings or income in earlier years and now want to bring their tax affairs into compliance.
What Happens To Declared Income And Investments?
The framework also provides that the income or amount invested in the foreign asset declared under the scheme will not be included in the taxpayer’s total income under the Income-tax Act, 1961, or the Black Money Act, 2015.
This provision forms an important part of the scheme’s compliance framework and is intended to give eligible taxpayers a defined route to resolve past reporting issues.
The disclosure window is limited. Taxpayers eligible to use FAST-DS will be able to submit their declarations beginning August 16, 2026, with the deadline falling on December 31, 2026.
Those considering the scheme should carefully assess the nature and value of their foreign assets or income, applicable tax and fee requirements, and the relevant valuation date before filing.