FAST-DS 2026: The New Disclosure Scheme for Undisclosed Foreign Assets
A one-time window to voluntarily declare undisclosed foreign assets or foreign income, in exchange for immunity under the Black Money Act - here is who qualifies, what it costs, and how the process works.
The Foreign Assets of Small Taxpayers - Disclosure Scheme, 2026 (FAST-DS) opened on 16.08.2026. It gives eligible taxpayers a one-time, limited window to come clean on undisclosed foreign assets or foreign income - and in some cases, on foreign assets that were already taxed but never reported in the ITR - before the department finds them first.
What Is FAST-DS?
FAST-DS is a one-time, voluntary disclosure scheme introduced by the Finance Act, 2026. It lets eligible taxpayers declare foreign assets or foreign income that were never taxed, or never reported in their Indian tax return, pay a fixed amount, and close the matter with immunity under the Black Money Act, 2015.
Without it, a foreign asset that comes to light later is dealt with under the Black Money Act - with heavy tax, penalty and prosecution risk. FAST-DS replaces that uncertainty with a defined, one-time cost. The declaration is made online.
Key Dates
The Scheme comes into force. Declarations can be filed from this date.
No declaration can be filed after this date - there is no provision to extend it.
Who Can Declare (Eligibility)
You can use the Scheme if you were a resident of India in the financial year that matters for your case. Your status today does not decide it - a person who is an NRI today can still qualify.
Which Financial Year's Status Matters?
| Your Case | Year That Matters | Example |
|---|---|---|
| Money earned abroad and never taxed in India (Category 1) | The year you earned the money, or bought the asset with it. You must have been a resident in that year. | Ravi deposited money in his Dubai account while living in India (FY 2019-20 onwards), so he qualifies - even if he becomes an NRI later. |
| Asset not shown in your tax return (Category 2) | The years you held the asset while resident and ordinarily resident (ROR), because those are the years it should have been reported. Your status when you bought it does not matter. | Priya bought her US assets as an NRI, but was ROR in later years and did not report them. Those later years are what count. |
In either case, one more condition applies: for that year, you either did not file a tax return, or filed one that left out the foreign asset or income, or the income escaped tax assessment.
What Can Be Declared
There are two categories. Which one applies depends on a simple question: was tax paid in India on the money, or not?
- Who
- You earned money abroad and never paid tax on it in India (see Ravi's example below)
- Limit
- ₹1 crore
- You pay
- 60% of the value
- Above the limit
- Scheme not available - full tax, penalty and prosecution risk under the Black Money Act
- Who
- You paid tax in India, or earned the money as an NRI, but did not show the asset in your tax return (see Priya's example below)
- Limit
- ₹5 crore
- You pay
- Flat ₹1 lakh
- Above the limit
- Scheme not available - no tax, but a penalty of ₹10 lakh for each year not reported
If the total crosses the limit, that category cannot be used at all. How the value is worked out is explained in the next section.
Our Foreign Income Tax Compliance article covers Schedule FA disclosure requirements in detail, if you are unsure whether an asset should already have been reported there.
How Assets Are Valued
Every asset is valued as on 31.03.2026. The general rule is the higher of what you paid for it and its market value on that date, ideally supported by a valuer's report. If no valuation is done, the cost adjusted for inflation (indexed cost) is taken instead.
| Asset | How It Is Valued |
|---|---|
| Foreign bank account | Total of all deposits since the account was opened, up to 31.03.2026 - not the balance |
| Listed shares, including RSU and ESOP shares | Higher of cost or the average of the day's highest and lowest price on 31.03.2026 (or the last trading day before it) |
| Unlisted shares | Higher of cost or value under a prescribed net-asset formula; else indexed cost |
| Other unlisted securities | Higher of cost or market value (valuer's report); else indexed cost |
| Property outside India | Higher of cost or market value, per a valuer recognised in that country; else indexed cost |
| Gold, jewellery, precious stones, art | Higher of cost or market value (valuer's report); else indexed cost |
| Share in a foreign firm, LLP or association | Your share of the entity's net assets, based on capital contribution and profit-sharing ratio |
| Any other asset | Higher of cost or market value; else indexed cost |
Foreign Bank Accounts - Total Deposits, Not Balance
Because a bank account is valued at total deposits, an account with little left in it today can still carry a high value. Three adjustments stop the same money from being counted twice: money withdrawn and put back into the same account is counted only once; if the account was declared earlier under the Black Money Act's 2015 compliance window with tax and penalty paid, only later deposits count; and if money from the account was used to buy another foreign asset, that amount is deducted from the account's value.
Examples: What You Pay in Practice
Category 1 costs tax at 30% plus an equal additional amount - 60% of the value in all. Category 2 costs a flat ₹1 lakh. Here is how that works in two common situations.
Who: Ravi lives and works in Hyderabad, so he is a resident of India.
- What he has: In 2019, Ravi opened a bank account in Dubai. Over the years, he deposited a total of ₹60 lakh into it from freelance earnings on which he never paid tax in India. After withdrawals for expenses, the account shows ₹45 lakh on 31.03.2026.
- What else: In FY 2023-24, he earned ₹20 lakh for a consulting project abroad, spent it there, and never showed it in his Indian tax return.
- Working out the value: The Dubai account counts at total deposits of ₹60 lakh, not the ₹45 lakh balance. Add the ₹20 lakh earnings, and the total is ₹80 lakh.
- Which category: Ravi never paid tax in India on this money, so it falls under Category 1. ₹80 lakh is within the ₹1 crore limit, so he can use the Scheme.
- What he pays: Tax at 30% (₹24 lakh) plus an equal additional amount (₹24 lakh) - ₹48 lakh in all.
- What he gets: No further tax, penalty or prosecution under the Black Money Act on this account and these earnings - including the separate ₹10 lakh-per-year penalty for not reporting the account, which applies because his foreign assets are well above ₹20 lakh.
- What if Ravi is an NRI now? Suppose Ravi moved to Dubai in 2025. He can still use the Scheme, because he was a resident of India in the years he earned and deposited this money - the value, category and ₹48 lakh payable stay the same. It would be different only if he had already been an NRI when he earned the money; then it was never taxable in India, and the position is like Example 2.
| Consequence | With FAST-DS | Without FAST-DS (Black Money Act) |
|---|---|---|
| Value declared: Dubai account ₹60 lakh (total deposits up to 31.03.2026) + consulting earnings ₹20 lakh (FY 2023-24) | ₹80,00,000 | ₹80,00,000 |
| Tax on ₹80 lakh at 30% | ₹24,00,000 | ₹24,00,000 |
| Additional amount / penalty on undisclosed income | ₹24,00,000 (equal to tax) | ₹72,00,000 (three times the tax) |
| Penalty for not reporting the account in the return | Nil | Up to ₹10,00,000 for each year |
| Prosecution | No - immunity | Possible |
| Total to pay | ₹48,00,000 | ₹96,00,000 or more |
Who: Priya worked in the US from 2015 to 2022, so she was a non-resident of India in those years. She moved back to Hyderabad in 2022 and is now a resident.
- What she has: From her US salary, she saved money in a US bank account and bought US shares. Deposits into the account total ₹40 lakh, and the shares are worth ₹1.2 crore on 31.03.2026.
- Was any Indian tax due? No. She earned this money as a non-resident, so it was never taxable in India.
- What went wrong: After becoming a resident, she did not list the account and shares in the foreign assets section (Schedule FA) of her Indian tax returns. The only mistake is non-reporting - not unpaid tax.
- Which category: Tax was not due, and the assets were only not reported, so this is Category 2. ₹1.6 crore is within the ₹5 crore limit, so she can use the Scheme.
- Why it matters: Not reporting foreign assets attracts a penalty of ₹10 lakh for each year under the Black Money Act. Since 01.10.2024, there is no penalty or prosecution if the total value of all foreign assets, other than property, stays within ₹20 lakh throughout the year (earlier, only bank accounts up to ₹5 lakh). Priya's ₹1.6 crore is far above that.
- What if her assets were smaller? Had her foreign assets together stayed within ₹20 lakh throughout the year, there would be no penalty. She would simply report them correctly from her next tax return, and FAST-DS would generally not be needed.
- What she pays: A flat fee of ₹1 lakh - no tax on the value of the assets.
- What she gets: Protection from the ₹10 lakh-per-year penalty and from prosecution for not reporting these assets.
| Consequence | With FAST-DS | Without FAST-DS (Black Money Act) |
|---|---|---|
| Value declared: US bank account ₹40 lakh (total deposits up to 31.03.2026) + US shares ₹1.2 crore (value on 31.03.2026) | ₹1,60,00,000 | ₹1,60,00,000 |
| Tax on the assets | Nil | Nil - earned while non-resident |
| Fee / penalty for not reporting the assets in the return | ₹1,00,000 flat | ₹10,00,000 for each year not reported |
| Prosecution | No - immunity | Possible |
| Total to pay (say, two years not reported) | ₹1,00,000 | ₹20,00,000 or more |
What Happens After You Declare
Once a declaration is made, the Income Tax Department confirms the amount payable, and the benefit of the Scheme depends on paying it on time. The overall timeline looks like this:
All foreign assets and income being declared, with their values as on 31.03.2026, are disclosed in one declaration.
The Department issues an order stating the exact amount payable - the tax and additional amount, or the flat fee.
The amount must be paid within two months from the end of the month of that order. Once payment is verified, a certificate is issued.
What You Get - Benefits and Immunities
Once You Declare and Pay on Time
- No further tax or penalty, and no prosecution, under the Black Money Act, 2015 for the declared asset or income
- The declared amount is not added to your income under the Income-tax Act or the Black Money Act
- If a tax assessment for that year is already in progress, the officer must take your declaration into account
What It Does Not Cover
- The future: from now on, the declared assets must be reported in Schedule FA every year, and any interest, dividends or gains on them are taxed as usual
- Refunds: amounts paid under the Scheme are not refundable
- Past assessments: once you declare, you cannot ask for an assessment already made on that asset or income to be corrected or revised, or claim relief for it in a pending appeal
Where the Scheme Does Not Apply
Excluded Situations
- Money or assets linked to a crime, where proceedings under the Prevention of Money-laundering Act, 2002 have been started or are pending
- An asset or income for a year in which an assessment under the Black Money Act, 2015 has already been completed
- Values above the limits - ₹1 crore for Category 1, ₹5 crore for Category 2
Frequently Asked Questions
No. With a nil balance throughout the year, the value is well below the ₹20 lakh threshold, so the ₹10 lakh penalty under the Black Money Act does not apply, and with no income there is no tax either. The account should still be reported in Schedule FA for every year you hold it as a resident and ordinarily resident - the obligation comes from holding the account, not from its balance. Report it correctly going forward, or close it if unused. Paying ₹1 lakh under FAST-DS is generally unnecessary.
It depends on the highest value during the year, not the closing balance. If all your foreign assets (other than property) together never exceeded ₹20 lakh, there is no penalty - just correct the reporting. If they exceeded ₹20 lakh, there is a penalty risk of ₹10 lakh for each year not reported. Where the money was taxed or earned as an NRI, FAST-DS Category 2 at a flat ₹1 lakh gives immunity; if the source cannot be explained, it is a Category 1 case at 60%. Also check that the account truly earned no interest - interest is taxable in India for a resident and ordinarily resident.
Compare what AIS shows with what you reported - account number, institution, country, peak and closing values, and the year. If your reporting was complete and correct, no further action is needed; keep the filed returns and account statements on record in case the Department follows up.
No, it is entirely voluntary. It is a one-time opportunity available only until 31.12.2026, after which no fresh declaration can be made under this Scheme.
Yes. What matters is your status in the year that counts for your case - the year you earned the untaxed money (Category 1), or the years you held the asset as a resident and ordinarily resident without reporting it (Category 2). Being an NRI or RNOR today does not by itself disqualify you.
No. Only deposits made after that earlier declaration are counted, provided the tax and penalty on it were paid.
For how foreign income, RSUs, ESOPs and Schedule FA reporting work generally, see our Foreign Income Tax Compliance guide. For other common questions on income tax, see our Income Tax FAQs, or contact us to discuss your case.