FAST-DS 2026: CBDT Notifies Foreign Assets Disclosure Scheme for Small Taxpayers

The CBDT has operationalised the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), providing a one-time opportunity for eligible taxpayers to voluntarily disclose certain undisclosed foreign assets and foreign income. The scheme is effective from 16 August 2026 and provides a time-bound route for regularising specified past non-disclosures.

What is FAST-DS 2026?

The scheme was introduced through Chapter IV, Sections 130 to 144 of the Finance Act, 2026. CBDT subsequently notified the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 through Notification No. 114/2026 dated 14 August 2026 (G.S.R. 732(E)).

The Rules came into force on 16 August 2026. The scheme is intended to provide relief to eligible taxpayers having relatively small foreign assets or foreign-source income that was not appropriately disclosed.

Who Can Benefit?

The scheme can be relevant to a person who is or was resident in India during the relevant period and satisfies the prescribed conditions. This can include certain:

• Individuals who received foreign ESOPs or RSUs but did not report them.
• Former students who continue to hold dormant or low-value overseas bank accounts.
• Returning non-residents with foreign savings or insurance policies.
• Persons who worked overseas or were deputed abroad and have legacy foreign assets.

The scheme covers undisclosed foreign income, undisclosed foreign assets and specified foreign assets that were acquired from already-taxed income or during a period of non-resident status but were not reported in the relevant tax return schedules.

Key Monetary Limits and Amount Payable

FAST-DS broadly provides two routes:

1. Undisclosed Foreign Assets or Foreign Income

Where the aggregate value of undisclosed foreign assets or undisclosed foreign income does not exceed Rs. 1 crore as on 31 March 2026:

• Tax is payable at 30%.
• An additional amount equal to 100% of such tax is payable.
• The combined amount effectively works out to 60% of the relevant asset value or undisclosed foreign income.

The Rs. 1 crore threshold is therefore an eligibility condition, not a tax exemption.

2. Foreign Assets Already Taxed or Acquired During Non-Resident Status

A separate provision applies where a foreign asset was:

• Acquired from income already offered to tax in India; or
• Acquired from foreign income while the taxpayer was non-resident and subsequently remained undisclosed after becoming resident.

For this category, the value of the foreign asset must not exceed Rs. 5 crore as on 31 March 2026, and a flat fee of Rs. 1 lakh is payable, subject to the scheme's conditions.

Valuation Date and Filing Procedure

The prescribed valuation date under Rule 2 of the FAST-DS Rules, 2026 is 31 March 2026. The value of the relevant foreign asset must therefore be determined in accordance with the valuation provisions applicable under the Rules.

The declaration must be furnished electronically in the prescribed manner. Form 1 is the declaration form under the scheme and is available through the Income Tax Department's e-Filing Portal. The portal has enabled Form 1 for filing under the Foreign Assets of Small Taxpayers Disclosure Scheme.

Last Date: 31 December 2026

The FAST-DS declaration window is time-bound. Eligible taxpayers must file their declaration by 31 December 2026. The scheme therefore provides a limited opportunity and should not be treated as an ongoing disclosure mechanism.

After the declaration is electronically verified, the prescribed income-tax authority determines the amount payable. The taxpayer is generally required to make payment within the specified period following the order, with a limited extension mechanism and interest where applicable.

Immunity and Important Exclusions

A valid declaration followed by payment of the prescribed amount provides immunity from further tax, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in respect of the income or asset covered by the declaration.

However, the scheme is not universally available. It excludes, among other cases:

• Income or assets representing proceeds of crime under the Prevention of Money Laundering Act, 2002.
• Cases where assessment proceedings under the Black Money Act have already been completed.
• Declarations containing false material information or suppression of material facts can become void.

Accordingly, eligibility and the source of the foreign asset should be carefully examined before filing.

Conclusion

FAST-DS 2026 offers eligible small taxpayers a structured, one-time opportunity to regularise specified undisclosed foreign assets and foreign income. With the 31 December 2026 deadline approaching, taxpayers should review their overseas bank accounts, investments, ESOPs/RSUs, insurance policies and other foreign holdings and determine whether the scheme applies.

Professional review is advisable because the applicable route, valuation, payment and immunity depend on the nature and source of the foreign asset or income.

For expert guidance on this topic, contact your tax professional today.