How Small Taxpayers Can Disclose Foreign Assets

Why this scheme matters to you

Many people carrying an undeclared foreign account are not hiding anything. A salary account left open after moving home. A property bought while working abroad. Shares from an old employer’s stock plan. The asset was legitimate; the Schedule FA entry simply never got made.

Until now, that gap sat under the Black Money Act, 2015, with its heavy tax, penalty and prosecution exposure. FAST-DS gives small taxpayers a defined, time-bound way to close it. The window closes on 31 December 2026, and no declaration can be filed after that date.

Key dates at a glance

The scheme is administered online by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems).

Who can declare under FAST-DS?

You are an eligible “assessee” if either applies:

1. You were resident in India (section 6 of the Income-tax Act, 1961) in the relevant previous year; or
2. You were non-resident or RNOR in the relevant previous year, but were resident in India in the year the undisclosed foreign income relates to, or the year the foreign asset was acquired.

So a person who is an NRI today can still declare, if they were resident when the income arose or the asset was bought.

A declaration can be made where you:

• did not file a return under section 139; or
• filed a return before the scheme began but did not disclose the asset or income in it; or
• have income or an asset that has escaped assessment under section 147.

The two routes: which one fits you?

FAST-DS has two categories, set out in the Table in section 133. Which one applies depends on where the money came from.

The ceilings are hard limits. The official illustrations show ₹90 lakh of assets plus ₹30 lakh of income (₹1.20 crore total) as not eligible under Route 1. A ₹3 crore property plus ₹3.5 crore of securities (₹6.5 crore) is not eligible under Route 2. Form 1 has separate rows for both routes, so assets under each can be reported in one declaration.

How much will it cost? A worked example

This example is taken from the notified rules. An undisclosed foreign bank account is worth ₹60 lakh on 31 March 2026. The person also earned ₹20 lakh of undisclosed foreign income in earlier years.

The combined ₹80 lakh is within the ₹1 crore ceiling, so Route 1 applies. Under Route 2, a ₹3 crore plot bought abroad while non-resident and later left out of the return costs a fee of ₹1 lakh.

How foreign assets are valued (Rule 3)

All values are taken as on 31 March 2026 and reported in rupees. The general rule is the higher of cost of acquisition and open-market value, ideally backed by a report from a valuer recognised in the country where the asset sits. If no valuation is done, the indexed cost of acquisition is treated as the fair market value.

The bank account rule surprises most people. Value is not the closing balance. It is the total of every deposit made since the account was opened, excluding deposits that are just a withdrawal from the same account put back. In the official example, an account with deposits since 2010 is valued at $4,900. Where the account was earlier declared under Chapter VI of the Black Money Act and taxed, only deposits after that declaration are counted.

Two more rules prevent double counting. If one asset was sold to buy another, the old asset’s value is reduced by the amount reinvested. The same applies when bank withdrawals or undisclosed income funded a new asset. An asset sold before 31 March 2026 is valued at the higher of cost and sale price.

Currency conversion uses the RBI reference rate on 31 March 2026. For currencies the RBI does not designate, value is first converted to US dollars at the local central bank’s rate.

For assets other than bank accounts, a variance of up to 20% between your declared value and the value later found by the Assessing Officer will not, by itself, make the declaration invalid.

Step-by-step: from declaration to immunity

1. File Form 1 online on or before 31 December 2026, with proof of acquisition or income, valuation reports where applicable, and passport details if you claim non-residence in any year declared.
2. Receive Form 2 (order of amount payable), issued within one month from the end of the month you filed.
3. Pay within two months from the end of the month in which the Form 2 order is received. Payment can be made in parts.
4. Late payment window: up to two further months, with simple interest at 1% for each month or part of a month.
5. File Form 3 (intimation of payment) with challan details and proof of payment.
6. Receive Form 4, the order certifying the declaration as valid and granting immunity, within one month from the end of the month of your intimation.

If the amount is not paid within the extended period, the declaration is treated as void and deemed never made. The official illustration shows this: an order dated 22 September 2026 means payment by 30 November 2026 without interest, 1% interest (₹48,000 on ₹48 lakh) if paid in December, and no scheme benefit after 31 January 2027.

What immunity you get

Once Form 4 is issued:

• No further tax or penalty, and no prosecution, under the Black Money Act, 2015, for the income or asset declared.
• The declared income or investment is not included in your total income under the Income-tax Act, 1961 or the Black Money Act.
• Where assessment proceedings are pending, the Assessing Officer must take your declaration into account.

In return, you cannot claim rectification, revision, set-off or relief in any appeal for assessments already made on the income or asset declared.

The immunity described in the notified rules and FAQs is under the Black Money Act and the income-tax laws. The documents do not extend it to FEMA. If your foreign asset also raises a FEMA reporting question, that needs a separate review.

When FAST-DS is not available

The scheme does not apply to:

• Any income or asset that directly or indirectly represents proceeds of crime, where proceedings under the Prevention of Money-laundering Act, 2002 have been initiated or are pending.
• Any income or asset relating to an assessment year for which Black Money Act assessment has already been completed.
• Declarations above the ₹1 crore (Route 1) or ₹5 crore (Route 2) ceilings.

Form 1 also asks you to certify that section 140 of the Finance Act, 2026 is not attracted. Check that section against your facts before signing.

Frequently asked questions about FAST-DS 2026

What is FAST-DS 2026? FAST-DS is the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026. It is a one-time voluntary scheme in sections 130–144 of the Finance Act, 2026, for declaring undisclosed foreign assets or income on payment of a specified tax or fee.

What is the last date to declare under FAST-DS? The last date is 31 December 2026. The scheme opened on 16 August 2026, and no declaration can be filed after 31 December 2026.

Can an NRI declare under FAST-DS? Yes, if the person was resident in India in the year the undisclosed income relates to, or the year the foreign asset was acquired. Passport details must be given in Form 1 when non-residence is claimed for any year declared.

How much tax is payable under FAST-DS? For undisclosed foreign assets or income up to ₹1 crore, the cost is 30% tax plus an equal amount, totalling 60% of the value. For assets bought from taxed income or while non-resident but not reported in the return schedule, the cost is a flat ₹1 lakh fee, up to ₹5 crore.

I forgot to report my foreign property in Schedule FA, but it was bought from taxed income. Which route applies? 

Route 2 (Table Sl. No. 2) covers assets acquired from income already offered to tax in India, or acquired while non-resident, but not declared in the relevant schedule. The fee is ₹1 lakh if the combined value is up to ₹5 crore.

How is a foreign bank account valued under FAST-DS? 

A foreign bank account is valued at the sum of all deposits made from the date of opening to 31 March 2026, not its balance. Deposits that simply return money withdrawn from the same account are excluded.

What if my foreign assets exceed ₹1 crore or ₹5 crore? 

If the aggregate crosses the ceiling for a route, you are not eligible under that route. The rules illustrate ₹6.5 crore of assets under Route 2 as not eligible.

What happens if I cannot pay on time? 

You have two months from the end of the month the Form 2 order is received, plus up to two further months at 1% simple interest per month or part. If payment is not made by then, the declaration is void and deemed never made.

Does FAST-DS give immunity from prosecution? 

Yes, under the Black Money Act, 2015. A valid declaration and payment give immunity from further tax, penalty and prosecution for the declared income or asset. The notified documents do not extend this immunity to FEMA.

Who cannot use FAST-DS? 

The scheme is not available for proceeds of crime where PMLA proceedings have been initiated or are pending. It is also unavailable for an assessment year where Black Money Act assessment is already complete.

Before you decide

The hardest part is usually not the form. It is knowing which route you fall under, what the account is actually worth under Rule 3, and whether anything else, such as FEMA reporting, is tied to the same asset. Those answers decide whether you pay 60% of the value, ₹1 lakh, or should not file at all.

Work backwards from 31 December 2026. Bank deposit histories, acquisition proofs and foreign valuation reports take time to gather, especially across time zones. Starting in October leaves room to get the numbers right.

AI disclosure: AI was used for summarising and formatting the notification and FAQs. It has been reviewed and edited by CA Lekshmi N. AI-assisted content can contain errors, so rely on the notified text for exact provisions.

Sources

• Ministry of Finance (CBDT), Notification No. 114/2026, G.S.R. 732(E), dated 14 August 2026: Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026, Gazette of India, Extraordinary, Part II, Section 3(i).
• Chapter IV (sections 130–144), Finance Act, 2026 (4 of 2026).
• FAST-DS FAQs  https://www.incometaxindia.gov.in/documents/81799/15520974/FAST-DS-FAQs.pdf