The Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS) is a one-time voluntary disclosure scheme introduced under Chapter IV, sections 130 to 144 of the Finance Act, 2026, read with the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026.

The scheme enables eligible taxpayers to disclose certain foreign assets or foreign income that were not properly reported earlier, subject to prescribed conditions, thresholds, tax or fee payment, and online filing requirements. The scheme came into force on 16 August 2026, and declarations can be filed up to 31 December 2026. The valuation date for assets is 31 March 2026.

Key Highlights at a Glance

Particular	FAST-DS 2026
Scheme commencement	16 August 2026
Last date for declaration	31 December 2026
Valuation date	31 March 2026
Filing mode	Online
Form for declaration	Form 1
Category 1 threshold	Up to ₹1 crore
Category 2 threshold	Up to ₹5 crore
Category 1 payment	30% tax + additional amount equal to tax
Category 2 payment	Flat fee of ₹1 lakh

1. What is the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026?

FAST-DS 2026 is a one-time voluntary scheme under which eligible taxpayers can declare certain undisclosed foreign assets, undisclosed foreign income, or foreign assets that were otherwise not reported in the relevant income-tax return schedule.

The disclosure is made by paying the tax, additional amount or fee prescribed under the scheme.

2. When is the scheme available?

The scheme became effective from 16 August 2026.

A declaration must be filed on or after 16 August 2026 and no later than 31 December 2026. No declaration can be filed after the prescribed last date.

3. What is the valuation date?

The prescribed valuation date is 31 March 2026.

Where an asset is required to be valued under the scheme, its fair market value is generally determined with reference to this date.

4. Who can make a declaration?

An eligible assessee may include a person who was resident in India in the relevant previous year.

The scheme can also cover a person who is currently a non-resident or Resident but Not Ordinarily Resident (RNOR), provided the prescribed past-residency conditions are satisfied. For example, such a person may qualify if they were resident in India during the year in which the relevant foreign income arose or the foreign asset was acquired.

5. Can a current non-resident use FAST-DS 2026?

Yes, in appropriate circumstances.

A presently non-resident person may make a declaration if they were resident in India in the year to which the undisclosed foreign income relates, or in the year in which the undisclosed foreign asset was acquired.

6. In what situations can a declaration be made?

A declaration may be made where the taxpayer:

• failed to furnish the relevant income-tax return;

• furnished a return but did not disclose the concerned asset or income; or

• has income or an asset that escaped assessment within the meaning of section 147 of the Income-tax Act, 1961.

7. What types of foreign assets or income can be disclosed?

The official FAQs broadly recognise two categories.

Category 1 — Undisclosed foreign assets or income

This covers an undisclosed asset located outside India or undisclosed foreign income that had not been offered to tax.

The aggregate value of the relevant undisclosed foreign assets as on 31 March 2026 together with undisclosed foreign income must not exceed ₹1 crore.

Category 2 — Foreign assets where tax was already dealt with but reporting was missed

This covers an asset located outside India which:

• had already been offered to tax; or

• was acquired when the taxpayer was a non-resident,

but which was not disclosed in the relevant schedule of the income-tax return.

For this category, the aggregate value of the foreign assets must not exceed ₹5 crore.

8. What is an “undisclosed asset located outside India”?

It includes an asset, including a financial interest in an entity outside India, held by the taxpayer in their own name or where they are the beneficial owner, where the source of investment cannot be satisfactorily explained as prescribed under the scheme.

9. What is “undisclosed foreign income”?

It means income from a source located outside India which was chargeable to tax in India but had not been offered to tax.

10. How much is payable under Category 1?

For Category 1 declarations, the prescribed payment consists of:

• tax at 30% of the value of the undisclosed foreign asset or undisclosed foreign income declared; and

• an additional amount equal to the tax payable.

This effectively makes the prescribed aggregate payment 60% of the relevant value or income declared, based on the structure explained in the official FAQs.

Example

If a taxpayer declares:

• Foreign bank account value: ₹60 lakh

• Undisclosed foreign income: ₹20 lakh

Total amount considered: ₹80 lakh.

The FAQ example calculates:

• Tax: ₹24 lakh

• Additional amount: ₹24 lakh

• Total payable: ₹48 lakh

11. How much is payable under Category 2?

For eligible Category 2 assets with an aggregate value not exceeding ₹5 crore, the scheme prescribes a flat fee of ₹1 lakh.

If the aggregate value exceeds ₹5 crore, the taxpayer is not eligible for this category of the scheme.

12. How is Fair Market Value determined?

As a general principle, the fair market value of an asset is the higher of:

• its cost of acquisition; or

• the price the asset would ordinarily fetch if sold in the open market on the valuation date.

Where applicable, the valuation may need support from a recognised valuer in the country where the asset is situated. If such market valuation is not carried out in cases covered by the Rules, indexed cost of acquisition may be treated as the fair market value.

13. How are shares and securities valued?

For quoted shares and securities, the valuation is generally the higher of the cost of acquisition and the prescribed quoted market value on the valuation date.

If no trading took place on the valuation date, the prescribed calculation refers to the nearest preceding date on which the shares or securities were traded.

Separate valuation rules apply to unquoted equity shares and other unquoted securities.

14. How is foreign immovable property valued?

For immovable property situated outside India, the fair market value is generally the higher of:

• cost of acquisition; and

• open-market value on the valuation date supported by a valuation report from a recognised valuer in the relevant country.

Where such valuation is not carried out, the Rules provide for indexed cost of acquisition to be considered in the circumstances specified.

15. How is a foreign bank account valued?

For a foreign bank account, the value is generally determined by aggregating deposits made into the account from the date of opening up to the valuation date, subject to specified exclusions.

For example, deposits representing re-deposit of withdrawals from the same account may be excluded to avoid double counting.

Special treatment also applies where an account or part of it was previously declared under Chapter VI of the Black Money Act, 2015.

16. In which currency should assets be reported?

All values are required to be reported in Indian Rupees.

For designated foreign currencies, conversion is based on the RBI reference rate on the valuation date.

For certain other currencies, the amount may first have to be converted into US dollars using the appropriate foreign central bank or regulated-bank rate, and then converted into Indian Rupees using the RBI reference rate.

17. Will a small valuation difference make the declaration invalid?

For assets other than bank accounts, the official FAQs state that a variance not exceeding 20% of the fair market value declared will not by itself invalidate the declaration on grounds such as misrepresentation, suppression of facts or furnishing false particulars.

18. How is the declaration filed?

The declaration is required to be filed electronically in Form 1 with the prescribed income-tax authority.

More than one asset, or more than one type of asset or income, may be disclosed in a single Form 1 by repeating the relevant entries in the form and annexure.

19. Are supporting documents required?

Yes.

Form 1 requires supporting documents relating to acquisition of the asset or earning of the income.

Where valuation has been carried out, a valuation report may also need to be uploaded for assets such as:

• immovable property;

• jewellery;

• artistic works;

• unquoted shares or securities; and

• other assets where valuation is applicable.

20. What happens after Form 1 is filed?

After electronic verification, the income-tax authority determines the amount payable and communicates it electronically through an order in Form 2.

The Form 2 order is to be issued within one month from the end of the month in which the declaration was made.

21. How much time is available for payment?

The amount determined in Form 2 must ordinarily be paid within two months from the end of the month in which the Form 2 order is received.

If payment is delayed, a further period of up to two months may be available, subject to simple interest at 1% for every month or part of a month of delay.

The official FAQs also prescribe an outer time limit beyond which the benefit of the scheme will cease to be available for that declaration.

22. How is payment reported?

After payment, the taxpayer must electronically furnish Form 3 along with proof of payment, including interest where applicable.

Once the payment intimation is found to be in accordance with the Form 2 order, the income-tax authority issues Form 4, certifying the payment.

23. What immunity is available after a valid declaration?

On a valid declaration and payment, immunity is provided from further tax, penalty and prosecution under the Black Money Act, 2015 in respect of the income or asset declared under the scheme.

The official FAQs further state that the declared income or investment amount will not be included again in the taxpayer's total income under the Income-tax Act, 1961 or the Black Money Act, 2015.

24. What if assessment proceedings are already pending?

Where assessment proceedings under the Income-tax Act, 1961 or the Black Money Act, 2015 are already pending in relation to the declared income or asset, the Assessing Officer is required to take the declaration into account while finalising the assessment order.

25. When is the scheme not available?

The scheme does not apply to certain cases, including:

• income or assets directly or indirectly representing proceeds of crime where proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002; and

• income or assets relating to an assessment year where assessment proceedings have already been completed under the Black Money Act, 2015.

Important Dates to Remember

16 August 2026
FAST-DS 2026 comes into force.

31 March 2026
Valuation date for assets covered by the scheme.

31 December 2026
Last date for filing a declaration.

Conclusion

FAST-DS 2026 provides eligible small taxpayers with a time-bound opportunity to regularise certain foreign assets or foreign income that were either not taxed earlier or not properly disclosed in the relevant income-tax return schedules.

However, eligibility, residential status, valuation methodology, monetary thresholds and the nature of the earlier non-disclosure can materially affect whether and how the scheme applies.

Taxpayers considering a declaration should therefore reconcile their foreign bank accounts, investments, shares, properties and foreign-source income, determine the applicable category, obtain valuation documents wherever required and complete the prescribed electronic filing and payment process within the statutory timelines.

Disclaimer: This article is a simplified summary of the official FAST-DS 2026 FAQs issued by the Income Tax Department and is intended for general informational purposes. Taxpayers should refer to the Finance Act, 2026, the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 and official Income Tax Department guidance, and obtain professional advice based on their individual facts before making a declaration.

Official Source: Income Tax Department — FAST-DS 2026 FAQs.