Foreign Assets Disclosure Scheme: Who Can Use FAST-DS And How Much Tax Will Apply?

The Income Tax Department has notified FAST-DS, allowing eligible small taxpayers to declare certain undisclosed foreign assets and income from August 16 to December 31, 2026. Taxpayers must pay 30 per cent tax plus an equal amount.

FAST-DS scheme: Small taxpayers can declare certain foreign assets till December 31

The Income Tax Department has notified rules for a new voluntary disclosure scheme that allows eligible small taxpayers to report certain undisclosed foreign assets and income without facing further tax, penalties or prosecution under the Black Money Act.

The Foreign Assets of Small Taxpayers-Disclosure Scheme, or FAST-DS, will come into effect on August 16, 2026. Online declarations can be filed until December 31, 2026.

Who is the scheme meant for?

The scheme was announced in the 2026-27 Union Budget with smaller taxpayers in mind. This includes students, young professionals, technology employees and non-resident Indians who have relocated and may have foreign assets or income that were not properly reported.

According to rules notified by the Central Board of Direct Taxes (CBDT), eligible taxpayers can declare certain undisclosed foreign assets, foreign income or foreign assets that were not mentioned in the relevant income tax return.

The fair market value of an asset covered by the declaration will be calculated as on March 31, 2026.

Two categories of foreign assets covered

The scheme broadly covers two types of cases.

The first involves an undisclosed asset outside India or foreign income that was not offered to tax. The combined value of the undisclosed asset in this category must not exceed Rs 1 crore.

The second covers foreign assets that had already been offered to tax or were acquired when the taxpayer was a non-resident but were not reported in the relevant schedule of the income tax return. In these cases, the value can be up to Rs 5 crore. A fee of Rs 1 lakh will apply to such declarations.

How much tax will taxpayers have to pay?

Taxpayers opting for FAST-DS will have to pay tax equal to 30 per cent of the value of the undisclosed foreign asset or income being declared.

An additional amount equal to the tax will also be payable. This effectively takes the total tax and additional levy to 60 per cent of the declared value, apart from the applicable Rs 1 lakh fee in the second category.

The CBDT explained the calculation through an example. If an undisclosed foreign bank account is valued at Rs 60 lakh and undisclosed foreign income amounts to Rs 20 lakh, the total value is Rs 80 lakh. Thirty per cent of this is Rs 24 lakh, with another Rs 24 lakh payable as the additional amount. The total comes to Rs 48 lakh.

What protection does FAST-DS offer?

A key benefit of the scheme is the immunity it provides for the assets and income covered by a valid declaration.

The taxpayer will not face further tax or penalty, or prosecution under the Black Money Act, 2015, in respect of the income or asset declared through the scheme.

The declared income or investment amount will also not be added to the taxpayer's total income under the Income-tax Act, 1961 or the Black Money Act.

The scheme therefore gives eligible taxpayers a limited window to correct certain foreign asset reporting issues by making a declaration and paying the prescribed amount before the December 31 deadline.

(With inputs from agencies)