Scheme: Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 (FAST-DS 2026)

Introduced via: Finance Bill, 2026 (Union Budget 2026-27)

Enabling clause: Clause 114 of the Finance Bill, 2026

Related statute: Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (“Black Money Act, 2015”)

Status as of 23 April 2026: The scheme has been introduced and is enacted in the Finance Bill. The commencement date has not yet been notified by the Central Government. No declarations can be filed until such notification.

1. Why this scheme was introduced

Under the Black Money Act, 2015, non-disclosure of foreign assets or foreign income by a person resident in India attracts heavy consequences: tax at a flat 30%, a penalty equal to three times the tax, and potential prosecution including imprisonment. The Act was designed to target concealed offshore wealth, but in practice the same framework has also applied to taxpayers with genuinely small or inadvertent non-disclosures — students who held minor foreign bank accounts, technology employees with vested RSUs or ESOPs from overseas parents, and returning NRIs who did not appreciate that their residential status in a given year required Schedule FA reporting.

FAST-DS 2026 is a one-time, six-month voluntary compliance window for such small taxpayers to regularise these defaults with certainty and immunity, without the disproportionate exposure of the default Black Money Act machinery.

2. The two categories — the core of FAST-DS 2026

The scheme draws a sharp distinction between two fact patterns. Most public summaries (including many infographics in circulation) mention only the first category; both need to be understood before deciding how to declare.

Category A — Undisclosed foreign income or foreign asset up to Rs. 1 crore

Applies where the taxpayer did not disclose the overseas income or asset in their Income Tax Return for the relevant year(s). The aggregate undisclosed income or Fair Market Value (FMV) of the asset must not exceed Rs. 1 crore.

  • Tax: 30% of the undisclosed income, or 30% of the FMV of the undisclosed asset, as applicable.
  • Additional levy (in lieu of penalty): a further 30% of the same base.
  • Effective outgo: 60% of the undisclosed income or FMV.
  • Interest: no interest is charged under the scheme.

Category B — Asset acquired from taxed income or during NRI status, but not reported in Schedule FA, up to Rs. 5 crore

Applies where the taxpayer did disclose the underlying overseas income and paid due tax, or acquired the asset while they were a non-resident, but failed to report the asset itself in Schedule FA of the ITR after becoming a resident. The asset value may extend up to Rs. 5 crore.

  • Payment: a flat fee of Rs. 1,00,000, regardless of asset value within the Rs. 5 crore ceiling.
  • Rationale: the tax has already been paid on the underlying income; the default is a reporting lapse, not a tax lapse.

3. Who can declare

The scheme is available to taxpayers whose undisclosed income or asset relates to a year in which they were resident in India for income-tax purposes. It therefore extends across residents, non-residents and Not-Ordinarily Residents, provided the declared default itself sits in a residency year. This is particularly relevant for:

  • Returning NRIs whose residential status has shifted to resident in a past year, triggering Schedule FA reporting from that year onwards.
  • Employees of Indian subsidiaries of foreign parents who hold vested RSUs, ESOPs, stock plans or retirement accounts abroad.
  • Individuals who opened a small foreign bank account during study or short-term work abroad and did not later report it.
  • Residents holding small cross-border mutual fund, brokerage or digital-asset wallets.

4. Immunity that follows a valid declaration

On making a valid declaration under either category and paying the specified amount within the scheme window, the declarant gets the following protections in respect of the declared asset or income:

  • Immunity from prosecution under the Black Money Act, 2015.
  • No further penalty under the Black Money Act, 2015 on the declared item.
  • The disclosed asset is not liable to reopening or reassessment in any subsequent year on the basis of the same default.

Immunity is specific to the item declared and to defaults covered by the scheme; it does not retrospectively cure defaults outside its scope (for example, income that exceeds the scheme’s monetary ceilings, or non-foreign defaults).

5. A related but distinct amendment — prosecution relief for aggregates under Rs. 20 lakh

Alongside FAST-DS 2026, the Finance Bill, 2026 proposes a structural amendment to the Black Money Act itself: prosecution is to be excluded where the aggregate value of undisclosed foreign assets other than immovable property does not exceed Rs. 20 lakh. This amendment is proposed to operate retrospectively from 1 October 2024.

This is not part of FAST-DS 2026; it is a permanent change to the prosecution threshold under the parent Act. A taxpayer whose total non-immovable foreign asset value is within Rs. 20 lakh will, after this amendment takes effect, be outside the prosecution net regardless of whether they use FAST-DS 2026. The distinction matters for planning — small-aggregate holders may or may not need the scheme, depending on their specific facts.

6. The commencement clause — the single most important practical point

The scheme, as introduced, provides that:

“It shall come into force from such date as may be notified by the Central Government.”

In concrete terms:

  • The scheme is not yet operational as on 23 April 2026. No declaration form, portal flow, or payment challan has been notified.
  • The 6-month window will be counted from the notified commencement date onwards, not from the date of Presidential assent to the Finance Bill.
  • Any payment made, or declaration attempted, before the notified commencement will not be a valid FAST-DS 2026 declaration.

Taxpayers and professionals should therefore prepare now — gather records, compute values, classify into Category A or B — but should not pay or file anything under FAST-DS 2026 until the Central Government formally notifies the commencement date.

7. Practical preparation checklist

  • Map the years. Identify every assessment year in which you were resident under section 6 of the Income-tax Act and held any foreign bank account, securities, insurance policy, beneficial interest, retirement account, or immovable property.
  • Reconstruct Schedule FA. For each such year, check whether the asset was reported in Schedule FA of the ITR filed (or not filed). Missing reporting is the default that the scheme addresses.
  • Classify into Category A or B. If the underlying income was itself never offered to tax, you are in Category A. If the income was taxed (or the asset was acquired as an NRI) and only the Schedule FA reporting was missed, you are in Category B.
  • Compute aggregate values. For Category A, compute the undisclosed income and FMV of the asset per the Black Money Act valuation rules. Confirm that the aggregate is within Rs. 1 crore. For Category B, confirm the asset value is within Rs. 5 crore.
  • Check the Rs. 20 lakh prosecution-exclusion test separately. Non-immovable aggregate below Rs. 20 lakh will, after the Finance Bill 2026 amendment, be outside prosecution risk even without the scheme — relevant for deciding whether FAST-DS 2026 is the optimal route.
  • Hold payment until notification. Do not deposit any amount under the scheme until the Central Government notifies the commencement date. Watch CBDT notifications and the Income Tax portal.
  • Document source of funds. For Category B especially, retain evidence of tax-paid income or NRI-period acquisition that funded the foreign asset.

8. What is still to come

The following pieces will be filled in only after the Finance Bill, 2026 receives Presidential assent and the Central Government issues the commencement notification:

  • Exact commencement date and therefore the closing date of the 6-month window.
  • Declaration form, payment challan, and procedural rules.
  • Final legislative text of Clause 114 as enacted, including any changes during parliamentary passage.
  • CBDT FAQs and clarificatory circulars, which historically follow major disclosure schemes.

This article will be updated as those pieces are notified.

Sources: Finance Bill, 2026 (Clause 114); Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015; Union Budget 2026-27 speech and Explanatory Memorandum; Ministry of Finance / CBDT press releases. Readers should verify the final enacted text and await formal commencement notification before acting under the scheme.

This article is general interpretation of the proposed scheme based on the Finance Bill, 2026. It is not a substitute for professional advice on any specific fact pattern.