SIMPLY 3 FINSERV PRIVATE LIMITED [CIN: U67190PB2022PTC056099] is an AMFI Registered Mutual Fund Distributors & SIF Distributor (ARN-249158)
Lokesh Malhotra [ARN-158405] | AMFI Registered Mutual Fund Distributor
FAST-DS 2026 provides eligible taxpayers a limited opportunity to disclose certain foreign assets and income
**This post is for general investor awareness only. It does not constitute tax, legal or investment advice or a recommendation to use FAST-DS. Consult your Chartered Accountant or qualified tax professional for your individual circumstances.
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The Government has introduced the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), a one-time voluntary disclosure scheme for eligible taxpayers who may have certain undisclosed foreign assets, undisclosed foreign income or undeclared foreign assets.
The Scheme came into force on 16 August 2026 and declarations can be filed up to 31 December 2026. The valuation date for assets covered under the Scheme is 31 March 2026.
The initiative is particularly relevant for situations involving inadvertent or legacy non-disclosure of overseas assets and income.
What is FAST-DS 2026?
FAST-DS is a one-time voluntary disclosure scheme under Chapter IV of the Finance Act, 2026.
It enables eligible taxpayers to declare specified:
- Undisclosed foreign assets
- Undisclosed foreign income
- Foreign assets that were already offered to tax or acquired when the taxpayer was a non-resident, but were not declared in the relevant Schedule of the tax return
Who can use the Scheme?
Broadly, an eligible assessee may be:
1. A resident in India in the relevant previous year; or
2. A person who is currently non-resident or RNOR, provided the person was resident in India in the relevant previous year to which the undisclosed foreign income relates or in the year in which the undisclosed foreign asset was acquired.
This means that a person who is currently living outside India cannot automatically assume that FAST-DS is irrelevant.
The person's residential status in the relevant year and the year of acquisition of the asset or earning of income matter.
When can a declaration be made?
There are three situations in which a declaration may be made:
- The taxpayer failed to furnish a return under section 139;
- The taxpayer filed a return but failed to disclose the relevant asset or income; or
- The relevant asset or income has escaped assessment under section 147.
The declaration window is:
16 August 2026 to 31 December 2026
No declaration can be filed after 31 December 2026.
What are the two broad categories?
FAST-DS broadly recognizes two categories.
Category 1 — Undisclosed foreign asset or foreign income
This covers:
- An undisclosed asset located outside India; or
- Undisclosed foreign income that was chargeable to tax in India but was not offered to tax.
An undisclosed foreign asset includes an asset, including a financial interest in an entity, held in the taxpayer's name or as a beneficial owner where the source of investment is not explained, or the explanation is considered unsatisfactory by the Assessing Officer.
Category 2 — Foreign asset not reported in the relevant Schedule
This covers an asset located outside India that:
- was already offered to tax; or
- was acquired when the assessee was a non-resident,
but was not declared in the relevant Schedule of the return of income.
This distinction is important.
Not every foreign asset below ₹5 crore automatically qualifies. The nature of the asset, source of funds, reporting history and other conditions of the Scheme must be examined.
What are the monetary limits?
There are two important thresholds.
| Category | Maximum threshold |
| Undisclosed foreign asset / undisclosed foreign income | ₹1 crore |
| Specified foreign assets not reported in the relevant Schedule | ₹5 crore |
For Category 1, the aggregate value of the undisclosed foreign asset as on 31 March 2026 plus undisclosed foreign income must not exceed ₹1 crore.
For Category 2, the aggregate value of the foreign assets must not exceed ₹5 crore.
What is the amount payable?
Category 1: Undisclosed foreign asset / income
The amount payable consists of:
30% tax + an additional amount equal to 100% of that tax
In effect, the total payable works out to 60% of the relevant value/income, subject to the provisions of the Scheme.
Category 2: Specified foreign assets not reported
A flat fee of ₹1 lakh is payable, provided the aggregate value of the assets does not exceed ₹5 crore and the other conditions of the Scheme are satisfied.
If the aggregate value exceeds ₹5 crore, the taxpayer is not eligible to avail the Scheme under this category.
How are foreign assets valued?
The valuation date is:
31 March 2026
As a general rule, the fair market value is the higher of:
- Cost of acquisition; or
- The price the asset would ordinarily fetch in the open market on the valuation date.
Where applicable, valuation should be supported by a report from a valuer recognised by the government or its agency in the country where the asset is located. Where such market valuation is not carried out, indexed cost of acquisition is deemed to be the fair market value.
Different valuation rules apply to different types of assets.
These include:
- Bullion, jewellery and precious stones
- Paintings, sculptures and artistic works
- Quoted shares and securities
- Unquoted equity shares
- Other unquoted securities
- Foreign immovable property
- Foreign bank accounts
- Interests in foreign partnership firms, AOPs and LLPs
- Other residual assets
Foreign bank accounts: an important valuation point
The valuation of a foreign bank account is not simply the balance lying in the account on 31 March 2026.
Under the FAQ, the value is generally based on the sum of deposits made into the account from the date it was opened up to the valuation date, subject to specified exclusions.
For example, withdrawals subsequently redeposited into the same account are excluded to prevent double counting.
This is an important point for taxpayers with old or dormant overseas bank accounts.
What about foreign currency?
Values have to be reported in Indian Rupees.
The FAQ specifies the prescribed methodology for converting foreign currency, including the use of the RBI reference rate for designated currencies and the prescribed conversion process for other currencies.
How is the declaration filed?
The declaration is filed electronically in Form 1.
A taxpayer can declare multiple assets or different types of income in the same Form 1, using the relevant portions and annexures.
Supporting documents are important.
Form 1 requires documents evidencing:
- Acquisition of the asset; or
- Earning of the income
and, wherever applicable, valuation reports.
What happens after Form 1?
After electronic verification, the Income Tax authority communicates the amount payable through an order in Form 2.
This is to be communicated within one month from the end of the month in which the declaration was made.
The taxpayer must generally make the payment within two months from the end of the month in which the Form 2 order is received.
If payment cannot be made within this period, a further period of up to two months is available, subject to simple interest of 1% for every month or part of a month of delay.
After payment, the taxpayer has to submit the prescribed intimation and proof of payment in Form 3.
Once this is accepted, the Income Tax authority issues a payment certification in Form 4.
What protection does a valid declaration provide?
Where a valid declaration is made and the prescribed amount is paid, the Scheme provides specified immunity from:
- Further tax
- Penalty
- Prosecution
under the Black Money Act, 2015, in respect of the income or asset covered by the declaration.
The declared income or amount of investment in the declared asset is also not included in total income under the specified provisions, subject to the Scheme's conditions.
However, this is not a blanket immunity for all past tax matters.
For example, the Scheme does not permit a taxpayer to claim rectification, revision, set-off or relief relating to an assessment already made in respect of the declared income or asset.
When does FAST-DS not apply?
The Scheme specifically excludes certain situations.
It does not apply to:
1. Income or assets that directly or indirectly represent proceeds of crime where proceedings have been initiated or are pending under the Prevention of Money-laundering Act, 2002; or
2. Income or assets relating to an assessment year for which assessment proceedings have already been completed under the Black Money Act, 2015.
What does this mean for investors?
For investors, the announcement is a reminder that owning an overseas investment and reporting that investment for Indian tax purposes are two different considerations.
Foreign assets can arise through several circumstances, including:
- Overseas employment benefits such as ESOPs or RSUs
- Foreign bank accounts
- Investments in overseas securities
- Assets acquired while working or studying abroad
- Foreign savings or insurance policies
- Assets acquired while being a non-resident
- Inherited or other overseas assets
The key question is not simply:
“Is the investment legal?”
It is also:
“Has the asset and the related income been appropriately reported under the applicable Indian tax provisions?”
FAST-DS 2026 provides an opportunity for eligible taxpayers to examine certain legacy or inadvertent reporting issues within a defined time window.
The deadline is 31 December 2026.
Anyone who believes they may have an overseas asset or foreign income that has not been appropriately reported should first establish their eligibility, valuation and tax position with a qualified tax professional/Chartered Accountant before making a declaration.
The Investor Takeaway
Global investing can provide diversification and access to international opportunities. But overseas investments also come with reporting and tax-compliance responsibilities.
FAST-DS 2026 is a limited, one-time compliance window — not a general waiver of foreign-asset reporting requirements.
For investors with overseas assets, this is an appropriate time to review, verify and stay compliant.
Disclaimer: This article is intended solely for general investor awareness and educational purposes. It does not constitute tax, legal, investment advice or a recommendation to make any declaration under FAST-DS 2026.
Eligibility, valuation, payment, immunity and other consequences are subject to the Finance Act, 2026, applicable Rules, the official FAST-DS FAQs and directions issued by the Income Tax Department/CBDT. Investors should consult their Chartered Accountant or qualified tax professional for their individual circumstances.
Mutual Fund investments are subject to market risks. Read all scheme-related documents carefully before investing.
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