CBDT Notifies Foreign Assets Disclosure Scheme, 2026

The Central Board of Direct Taxes (CBDT) has operationalised the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS), providing a one-time opportunity to eligible taxpayers to regularise certain undisclosed foreign assets and income. The scheme is effective from 16 August 2026, with declarations required to be filed by 31 December 2026.

What is FAST-DS 2026?

FAST-DS is contained in Chapter IV of the Finance Act, 2026, covering Sections 130 to 144. It is intended to provide relief to taxpayers who have certain foreign assets or foreign income that was not appropriately disclosed or reported.

The CBDT has notified the Foreign Assets of Small Taxpayers – Disclosure Scheme Rules, 2026 through Notification No. 114/2026-Income Tax dated 14 August 2026. The Rules came into force on 16 August 2026.

The scheme may be particularly relevant for cases such as foreign ESOPs/RSUs, dormant overseas bank accounts, foreign savings or insurance policies and similar legacy non-disclosures.

Two Key Categories Covered

1. Undisclosed Foreign Assets or Foreign Income – Up to ₹1 Crore

Where the aggregate value of eligible undisclosed foreign assets and undisclosed foreign income does not exceed ₹1 crore as on 31 March 2026:

• Tax is payable at 30% of the relevant value.

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• An additional amount equal to 100% of such tax is payable.

• Accordingly, the effective amount payable is 60% of the value of the eligible asset or undisclosed foreign income.

This category covers foreign assets where the source of investment is not adequately explained and foreign income that should have been offered to tax but was not.

2. Specified Foreign Assets – Up to ₹5 Crore

A separate relief is available where the foreign asset:

• Was acquired when the taxpayer was a non-resident, or

• Was acquired from income already offered to tax in India,

but the asset was not reported in the relevant foreign asset schedule of the income-tax return.

Where the prescribed conditions are satisfied and the value does not exceed ₹5 crore as on 31 March 2026, a flat fee of ₹1 lakh is payable.

Important Compliance Dates

The notified framework provides the following key dates:

• Scheme effective from: 16 August 2026

• Valuation date: 31 March 2026

• Last date for filing declaration: 31 December 2026

• Declaration: To be filed electronically in the prescribed Form 1

The valuation of foreign assets is required to be determined in accordance with the valuation rules applicable to the nature of the particular asset.

Filing and Payment Process

Eligible taxpayers must make the declaration electronically and verify it in the prescribed manner. After verification, the prescribed income-tax authority communicates the amount payable through an order.

The amount determined is generally required to be paid within two months from the end of the month in which the order is received. A further extension of two months is available, subject to simple interest of 1% for every month or part of a month on the unpaid amount.

Immunity from Penalty and Prosecution

A valid declaration, followed by payment of the prescribed amount, provides immunity in respect of the declared income or asset from further tax, penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, subject to the conditions of the Scheme.

However, the scheme does not apply to specified proceeds of crime or cases where assessment proceedings under the Black Money Act have already been completed. False declarations or material suppression of facts can also result in the declaration being treated as void.

What Should Taxpayers Do?

Taxpayers who have previously lived or worked overseas, received foreign ESOPs or RSUs, maintained foreign bank accounts, or acquired overseas investments should review their historical foreign asset disclosures carefully.

Before filing Form 1, taxpayers should:

1. Identify all relevant foreign assets and income.

2. Determine whether the asset falls within the ₹1 crore or ₹5 crore category.

3. Establish the correct value as on 31 March 2026.

4. Verify the source of acquisition and previous tax treatment.

5. Review earlier income-tax returns and foreign asset schedules.

6. Maintain supporting ownership, acquisition, income and valuation documents.

7. File the declaration electronically within the prescribed deadline.

Conclusion

FAST-DS 2026 provides a time-bound compliance opportunity for eligible taxpayers to address certain historical foreign asset and income disclosure issues. Since the declaration involves valuation, eligibility conditions and significant financial consequences, taxpayers should assess their position carefully before filing.

For expert guidance on this topic, contact your tax professional today.

EXCERPT: FAST-DS 2026 lets eligible taxpayers disclose certain foreign assets or income, with 31 December 2026 as the filing deadline.

SEO_TITLE: FAST-DS 2026: Foreign Asset Disclosure Scheme

SEO_DESCRIPTION: Learn about FAST-DS 2026, ₹1 crore and ₹5 crore limits, Form 1 and deadlines. Review your foreign assets and seek expert tax guidance.