Foreign Assets of Small Taxpayers — Disclosure Scheme

This document covers

1. Eligible taxpayers who can opt for this scheme
2. Types of income or assets that can be disclosed under the scheme
3. Monetary Limits to be eligible under this scheme
4. Declaration Window for FAST DS Scheme
5. Tax payable on such undisclosed foreign assets or income
6. Process of availing this opportunity
7. Valuation of Assets
8. Exclusions to this scheme
9. Last date for making a declaration under the Scheme
10. Key Benefits of FAST-DS
11. Fast DS or Updated Returns? A new compliance confusion

1. Eligible taxpayers who can opt for this scheme

The eligible taxpayers who can opt for this scheme are as follows

• Residents of India who failed to file the ITR or failed to disclose the foreign income or asset in their income tax return
• NRI's or RNOR who was resident in India in the financial year in which the undisclosed foreign income relates or undisclosed foreign assets acquired

Common examples of taxpayers who may benefit from the scheme subject to the other conditions of FAST-DS are as follows

• Employees of MNC companies who are receiving RSU, ESOP, ESPP etc. from employers but did not report them in their income tax returns
• Former students or employees who studied or worked abroad and having foreign bank accounts.
• Returning non-residents with undisclosed foreign savings or insurance policies or properties or other assets
• Government or mission staff working overseas who may have foreign financial assets

2. Types of income or assets that can be disclosed under the scheme

The following types of income or assets that can be disclosed under the scheme

• Undisclosed foreign income (A) which was not offered to tax or Undisclosed foreign asset (B)
• Foreign assets purchased from taxed income or during NRI status but not reported in ITR

B. Undisclosed Asset: It means the foreign asset where the taxpayer has no explanation about source of investment or the explanation is not satisfactory in the opinion of Assessing officer

3. Monetary Limits to be eligible under this scheme

• Undisclosed foreign income / undisclosed foreign assets — Up to Rs 1 crore as on 31st March 2026
• Foreign assets purchased from taxed income or during NRI status — Up to Rs 5 crore as on 31st March 2026. This scheme is not available if the value of foreign assets is more than Rs 5 crore

4. Declaration Window for FAST DS Scheme

The declaration window under FAST DS Scheme is from 16th August 2025 to 31st December 2026. Eligible taxpayers can submit their declaration during this period, subject to the applicable conditions and monetary limits. No declaration can be filed after 31st December 2026

5. Tax payable on such undisclosed foreign assets or income

• Undisclosed foreign income / undisclosed foreign assets — The taxpayer is required to pay 60% (30% tax +30% penalty) of the value of undisclosed foreign asset or income as on 31st March 2026
• Foreign assets purchased from taxed income or during NRI status — The taxpayer is required to pay a flat fee of Rs 1,00,000

6. Process of availing this opportunity

• The taxpayer needs to file a declaration electronically in Form 1 within the period notified by Central Government
• The Income Tax authority will communicate the amount payable in Form 2 within 1 month from the end of the month in which such declaration is filed.
• Tax Payment: The taxpayer is required to pay the amount within 2 months from the end of the month in which the order (form 2) was received.
• Extension of time: A further extension of two months is permitted, and no extension beyond this period is allowed. However, interest @ 1% per month will be levied for these 2 months.
• The payment of taxes needs to be reported by taxpayer in Form 3 within the period allowed for payment.
• If the intimation by taxpayer is in accordance with Form 2, the income tax officer will issue the order in Form 4 within 1 month from the end of the month in which the intimation was received

7. Valuation of Assets

As per the general rule, the fair market value of assets needs to be computed is higher of

• cost of acquisition or
• price the asset would ordinarily fetch if sold in the open market on the valuation date

1. Jewellery /archaeological collections, paintings, sculptures or other artistic works: Higher of the cost of acquisition or its open-market price on the valuation date (supported by a recognised valuer’s report)
2. Quoted shares and securities: Higher of the cost of acquisition and the average of the lowest and highest price quoted on an established securities market on the valuation date
3. Immovable property: higher of the cost of acquisition and the open-market price on the valuation date, as per a valuation report from a valuer recognised by the government
4. Foreign bank Account: The value is the total deposits made from the account opening date up to the valuation date, excluding
   
   • Deposits already covered under an earlier Black Money Act, 2015 declaration—only deposits after that declaration are counted.
   • Deposits made from withdrawals from the same account, to avoid double counting.

8. Exclusions to this scheme

This scheme does not apply to

• Cases involving proceeds of crime under PMLA (income or assets representing proceeds of crime under the Prevention of Money Laundering Act, 2002)
• Cases already completed under the Black Money Act

9. Last date for making a declaration under the Scheme

The last date for making a declaration under this scheme is 31st December 2026

10. Key Benefits of FAST-DS

• One-time compliance window
• Protection from penalty and prosecution
• Helps correct past reporting mistakes
• Reduces future litigation risk
• Simplifies compliance for small taxpayers with foreign exposure

11. Fast DS or Updated Returns? A new compliance confusion

The introduction of FAST-DS has created a new confusion for taxpayers with undisclosed foreign income or foreign assets.

• While FAST-DS provides a specific window to disclose eligible foreign assets and income, taxpayers are also having the option of filing an Updated Return (ITR-U) for earlier years, subject to the applicable conditions and time limits.
• This effectively leaves taxpayers with two different compliance routes for addressing past non-disclosure, making it important to understand which provision applies before taking any action.
• The confusion is further compounded by the significant difference in the additional tax payable under ITR-U and the tax/penalty or fee applicable under FAST-DS. Depending on the year and circumstances, taxpayers may find the 25%, 50%, 60% or 70% additional tax under ITR-U more relevant than the liability under FAST-DS, potentially influencing which route they choose.
• Adding to the uncertainty, the FAST-DS declaration forms are still not available on the Income Tax Portal as of 28 August 2026, even though the scheme has already commenced.