CBDT Notifies Foreign Assets of Small Taxpayers Disclosure Scheme, 2026

The Central Board of Direct Taxes (CBDT) has notified the Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS 2026), providing a one-time opportunity to eligible taxpayers to regularise certain undisclosed foreign assets and foreign income. The Scheme comes into force from 16 August 2026 and provides a limited compliance window up to 31 December 2026. (The Economic Times)

Key Features of FAST-DS 2026

1. Who can benefit from the Scheme?

The Scheme is intended for persons who are or were residents in India during the relevant period and meet the prescribed conditions. It may cover, among others:

• Taxpayers who failed to disclose foreign income or assets in their income-tax return.

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• Individuals holding foreign assets acquired while they were non-residents but which were not subsequently reported.

• Taxpayers who acquired foreign assets from income that had already been offered to tax in India but omitted the asset from the relevant foreign-asset disclosure schedule.

• Cases involving legacy holdings such as foreign bank accounts, ESOPs/RSUs, foreign investments and insurance policies. (Etds)

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Section 132 of the Scheme permits a declaration where the taxpayer failed to furnish a return, failed to disclose the relevant asset or income in a return already furnished, or the income/asset has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. (Etds)

1. Amount payable – Two categories

The Scheme provides different treatment depending upon the nature and source of the foreign asset or income.

Category 1 – Undisclosed foreign asset or foreign income

Where the aggregate value of the undisclosed foreign asset and foreign income does not exceed Rs. 1 crore:

• Tax is payable at 30% of the value of the undisclosed foreign asset as on 31 March 2026 and/or undisclosed foreign income.

• An additional amount equal to 100% of the tax so determined is payable.

• Therefore, the combined financial outgo effectively works out to 60% of the relevant amount. (Etds)

Category 2 – Foreign assets acquired from disclosed/taxed income

A fixed fee of Rs. 1 lakh is payable where:

• The foreign asset was acquired from income earned while the taxpayer was a non-resident and was not disclosed after becoming resident; or

• The foreign asset was acquired from income that had already been offered to tax in India but the asset was not disclosed in the relevant return schedule; and

• The value of the foreign asset does not exceed Rs. 5 crore. (TaxGuru)

1. Valuation date – 31 March 2026

For Category 1 declarations, the value of an undisclosed foreign asset is determined with reference to its value as on 31 March 2026.

The notified rules also provide valuation mechanisms for different types of foreign assets, including securities, jewellery, artistic works and immovable property. This makes proper valuation documentation important before filing the declaration. (Etds)

1. Filing of Form 1

The declaration is required to be furnished electronically in the prescribed Form 1. Taxpayers should ensure that the declaration is complete and supported by appropriate documents relating to ownership, acquisition, source of funds and valuation before submission. The Scheme provides for electronic verification and subsequent electronic communication of the amount payable. (The Economic Times)

1. Last date – 31 December 2026

Eligible taxpayers can use the FAST-DS 2026 window from 16 August 2026 until 31 December 2026. The deadline is therefore important for taxpayers who need time to collect historical bank statements, investment statements, ESOP/RSU records, property documents and valuation evidence. (The Economic Times)

Benefits of the Scheme

Subject to fulfilment of the prescribed conditions and payment of the amount determined under the Scheme:

• The declared income or asset is not included in the taxpayer's total income for the relevant purposes.

• The Scheme provides limited immunity from penalty and prosecution under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in respect of matters covered by the valid declaration.

• Amounts paid under the Scheme are non-refundable. (Etds)

Important Compliance Point

FAST-DS 2026 should not be viewed as a general amnesty for every foreign asset. Eligibility depends on the taxpayer's residential status, nature and source of the asset or income, value of the asset, prior tax-return disclosures and other statutory conditions.

Taxpayers should therefore review their historical income-tax returns, Schedule FA disclosures, foreign bank accounts, overseas investments, ESOPs/RSUs and other foreign holdings before deciding whether a declaration is required.

Conclusion

FAST-DS 2026 provides a time-bound opportunity to regularise eligible legacy or inadvertent foreign-asset and foreign-income non-disclosures. Taxpayers who may fall within the Scheme should undertake an early review of their foreign holdings, valuation and source of funds rather than waiting until the December 2026 deadline.

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

Sources: CBDT/Income-tax Department – Finance Act, 2026 and FAST-DS FAQs; CBDT Notification No. 114/2026 dated 14 August 2026, effective 16 August 2026. (Etds)

EXCERPT: FAST-DS 2026 offers eligible taxpayers a one-time window to disclose certain foreign assets and income by 31 December 2026.

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