Foreign Assets Disclosure Scheme 2026 (FAST-DS)

India has opened a one-time window for taxpayers to declare foreign assets and foreign income they never reported. The FAST-DS 2026 window runs from 16 August 2026 to 31 December 2026 — the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026, in the tax department's own shorthand. A taxpayer who files a valid declaration and pays what the scheme demands receives immunity from further tax, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 for the assets and income declared.

The scheme was legislated in Chapter IV (sections 130 to 144) of the Finance Act, 2026. On 13 August 2026 the CBDT released a set of 50 official FAQs, and on 14 August 2026 it notified the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026. The statute, the Rules with their valuation formulas and worked illustrations, and the CBDT's clarifications together contain the entire law of the scheme, and every statement in this article cites one of the three.

The scheme has two routes, and they work on different logic:

• Route 1: genuinely undisclosed foreign assets or foreign income, meaning money that escaped Indian tax altogether. The cost is 30% tax plus a penalty equal to 100% of that tax, an effective 60% of the declared value. The ceiling is an aggregate value of ₹1 crore.
• Route 2: foreign assets bought with money that was never taxable in India (earned while the taxpayer was a non-resident) or that was already taxed in India, but which were not reported in Schedule FA of the income tax return. The cost is a flat fee of ₹1 lakh, whether the asset is worth ₹50 lakh or ₹4.9 crore. The ceiling is an aggregate value of ₹5 crore.

The timing follows the department's data position. India receives automatic annual data on Indian-held foreign financial accounts from over 100 jurisdictions under the Common Reporting Standard (CRS) and from the United States under FATCA. The department's recent "NUDGE" campaigns matched that data against Schedule FA filings and sent targeted letters; Deccan Herald reported in the run-up to the scheme that over 30,000 taxpayers had disclosed foreign assets of about ₹29,000 crore in response to those campaigns. The scheme offers settlement terms while that enforcement programme continues, and it closes on 31 December 2026.

FAST-DS 2026 at a glance

Three documents contain the entire law of the scheme:

Download the primary sources

The statutory map: Chapter IV, Finance Act 2026

The four dates that govern everything

Eligibility has three layers: who you are (residential status), what grounds you declare on, and what you are declaring (covered in the next section). The definition of an eligible "assessee" in section 131(1)(a) is wider than most early reports suggested; it is not restricted to current residents.

Layer 1: residential status

You are an eligible assessee if you are:

• A resident in India (under section 6 of the Income-tax Act, 1961) in the relevant previous year; or
• A non-resident or resident but not ordinarily resident (RNOR) now, provided you were resident in India either (a) in the previous year to which the undisclosed foreign income relates, or (b) in the previous year in which the undisclosed foreign asset was acquired.

The second limb covers a common NRI situation: a person who was resident when the default occurred but has since moved abroad can still use the scheme. Form 1 asks for the declarant's residential status in the year of acquisition or earning, and requires passport details wherever non-residence is claimed.

Layer 2: grounds for declaration (section 132)

A declaration may be made for any previous year where any one of three things happened:

Layer 3: the two statutory exclusions (section 140)

The scheme does not apply to:

• any income or asset representing, directly or indirectly, proceeds of crime in respect of which proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002; and
• any income or asset relating to an assessment year for which assessment proceedings have already been completed under the Black Money Act, 2015.

Check your eligibility

The scheme's obligations derive from a two-row table in section 133. Row one covers money that escaped tax; row two covers taxed or non-taxable money that was left unreported. The routes differ in what qualifies, what it costs, and what ceiling applies, and exceeding a ceiling bars the declaration entirely rather than capping it.

Aggregation examples from the Rules

The ₹1 crore and ₹5 crore thresholds are tested on the aggregate of everything declarable under that row. The CBDT's illustrations to Rule 5 show how the aggregation works:

Route 1: the 60% computation

The CBDT's worked example (FAQ Q.18, mirroring the illustration in Rule 4):

Route 2: the flat fee

The 60% rate has a precedent: it is the same price the 2015 one-time compliance window under Chapter VI of the Black Money Act charged (30% tax + 30% penalty), and well below the roughly 120% plus prosecution that follows a completed Black Money Act assessment. That comparison is worked out in the Black Money Act section below. The ₹1 lakh flat fee for Route 2 costs less than what many taxpayers would spend contesting a single ₹10 lakh Schedule FA penalty notice.

The thresholds, the 60% levy and eligibility itself all depend on the fair market value (FMV) as on 31 March 2026, so the valuation exercise decides more than the bill. Rule 3 prescribes a method for each asset class. The recurring pattern is higher of cost of acquisition and open-market value on the valuation date, with one default that changes outcomes:

Asset-by-asset rules

The bank account illustration, worked

The Rules illustrate the deposit-sum method with a 15-year account history in which both exclusions operate:

Three cross-cutting valuation rules

Assets sold before 31 March 2026 still count (Rule 3(2)). If an asset (other than a bank account) was transferred before the valuation date, its FMV is the higher of cost and the sale price. Gifted or under-priced transfers take the higher of cost and FMV on the transfer date. Selling an asset in 2024 does not remove it from the declaration.

No double counting on reinvestment (Rule 3(3)). Where sale proceeds or a bank withdrawal funded a new asset, the old asset's (or account's) FMV is reduced by the amount reinvested. The Rules' example: house H1 (cost ₹20 lakh) sold for ₹25 lakh into a foreign bank account; ₹30 lakh withdrawn from that account to buy house H2 (FMV ₹50 lakh); account value computed at ₹70 lakh. Result: H1 nil; bank account ₹70 lakh minus ₹30 lakh = ₹40 lakh; H2 ₹50 lakh. The same netting applies when undisclosed foreign income funded an asset: ₹70 lakh of income that bought a ₹60 lakh property is declared as ₹10 lakh income plus the property at its ₹80 lakh FMV.

Currency conversion (Rule 3(4)-(5)). RBI-designated permitted currencies convert to INR at the RBI reference rate on 31 March 2026. Any other currency converts first to US dollars at the rate of the central bank of the country where the asset is located (or a bank regulated there), then to INR at the RBI reference rate on the valuation date.

The scheme runs electronically before a single authority, the Principal Director General or Director General of Income-tax (Systems). Four forms cover the whole process:

Section 135 sets a four-stage clock after the declaration. The Rules' illustration (an order dated 22 September 2026 on a ₹48 lakh liability) shows how it runs:

What the immunity covers

• Immunity from the Black Money Act: no further tax, no penalty and no prosecution under the 2015 Act in respect of the declared income or assets, covering PY 2025-26 and every earlier year (section 139).
• Non-inclusion in total income: the declared income or investment cannot be added to total income for any assessment year under the Income-tax Act, 1961 or the Black Money Act (section 136).
• A conclusive certificate: the Form 4 order is conclusive as to the matters it states (section 135(6)), with Forms 1 to 3 annexed as a complete record.
• Pending assessments must factor it in: where Income-tax Act or Black Money Act assessment proceedings are pending on the declared items, the AO is bound to take the declaration into account while finalising (section 141).

What it does not cover

The scheme's terms can only be evaluated against the alternative. The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 is the regime that applies to undeclared foreign assets, and it continues to apply after the window closes to anyone who did not declare.

The Black Money Act's arithmetic

Under the 2015 Act, undisclosed foreign income and assets are taxed at a flat 30% (section 3), with no exemptions, no deductions and no indexation, and section 41 adds a penalty of three times the tax, taking the total to roughly 120% of the asset's value. Separately, failure to file a return of foreign assets or filing an inaccurate Schedule FA each attracts a ₹10 lakh penalty per default per year (sections 42-43, subject to one de-minimis carve-out: since 1 October 2024, no penalty where the aggregate value of the assets, other than immovable property, does not exceed ₹20 lakh — the Finance (No. 2) Act, 2024 substituted this for the earlier ₹5 lakh bank-account threshold). Prosecution runs in parallel: six months to seven years of rigorous imprisonment for failure to disclose, and three to ten years for wilful evasion. The Act also has no practical limitation period; an asset acquired decades ago is charged in the year the Assessing Officer discovers it.

Why the department already has the data

Three information streams cover most undeclared foreign assets:

• CRS and FATCA: India automatically receives annual account-level data (balances, interest, dividends, sale proceeds) from over 100 jurisdictions, including jurisdictions historically used for banking secrecy. Swiss, UAE and Singapore accounts of Indian residents are reported to Indian systems every year without any request.
• NUDGE campaigns: since 2024 the CBDT has run data-matching drives comparing CRS/FATCA feeds against Schedule FA, sending targeted letters rather than notices. Deccan Herald reported that over 30,000 taxpayers had revised returns to disclose foreign assets worth about ₹29,000 crore in response to these campaigns before the scheme launched.
• The 2015 precedent: the Black Money Act's own one-time window (Chapter VI, July-September 2015) drew 648 declarations of about ₹4,164 crore. Taxpayers who skipped it faced the full Act. FAST-DS Route 1 charges the same 60% that window charged.

How FAST-DS compares with India's earlier disclosure windows

Who should act, and how

The clear Route 2 cases should act early. Returned NRIs holding legacy foreign accounts, retirement plans (401(k), CPF, superannuation), ESOPs of foreign employers, or property bought abroad from NR-period or tax-paid income, who never filled Schedule FA. For them the arithmetic is one-sided: ₹1 lakh against a ₹10 lakh-per-year penalty exposure and prosecution risk. The main work is documentation, because proving the funding source was clean is what keeps a case in Route 2.

The Route 1 cases need modelling before filing. Where income genuinely escaped tax, 60% is steep but final. Three numbers decide the question: the Rule 3 valuation (deposit-sum method for accounts; indexed-cost default where no valuation), the aggregate against the ₹1 crore ceiling, and the counterfactual Black Money Act exposure of roughly 120% plus per-year penalties plus prosecution. On those numbers the scheme will usually be the cheaper outcome, but only inside the ceiling.

Borderline aggregates should be valued first and decided second. Because exceeding a ceiling bars the route entirely, taxpayers near ₹1 crore or ₹5 crore should complete the full Rule 3 valuation exercise before any decision. The indexed-cost default, the redeposit exclusions and the Rule 3(3) reinvestment netting can each bring an aggregate within the ceiling, legitimately.

Common mistakes the Rules already anticipate

For the remittance framework that governs how money goes abroad legally once the past is settled, see: